Question

Camera Crawlers manufactures picture frames. Sales for December are expected to be 10,000 units of various sizes. Historically, the average frame requires twometres of framing, one square metre of glass, and one square metre of backing. Beginning inventory includes 1400 metre of framing, 1000 square metres of glass, and 800 square metres of backing. Current prices are $1.00 per metre of framing, $5.00 per square metre of glass, and $3.00 per square metre of backing. Ending inventory should be 150% of beginning inventory. Purchases are paid for in the month acquired.

Required:

1. Determine the quantity of framing, glass, and backing that is to be purchased during December.                                                                                 (10 marks)

2. Determine the total costs of direct materials for December purchases.                  

(10 marks)

Answer 1

	Framing	Glass	Backing	Total
Expected Sales	10,000	10,000	10,000
Raw material per unit	2	1	1
Required for Sales	20,000	10,000	10,000
Add: Desired Ending Inventory	2,100	1,500	1,200
Less: Beginning Inventory	1,400	1,000	800
Quantity To be Purchased	20,700	10,500	10,400
Cost per Unit	1	5	3
Total cost of purchases	20,700	52,500	31,200	104,400

Hence, total cost of material = $104,400