Question

Camera Crawlers manufactures picture frames. Sales for December are expected to be 10,000 units of various sizes. Historically, the average frame requires three metres of framing, two square metre of glass, and two square metres of backing. Beginning inventory includes 800 metre of framing, 200 square metres of glass, and 300 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 a

1. Determine the quantity of framing, glass, and backing that is to be purchased during December.                                                                                          (10 marks)
2. 1. Determine the total costs of direct materials for December purchases.                   

cquired.

Answer 1

Answer a)

Calculation of Quantity of Framing, Glass and Backing required to be purchased during December

	Framing	Glass	Backing
Beginning Inventory	800 Metres	200 Square Metres	300 Square Metres
Required in production
Frames: (10,000 Units X 3 metres per unit)	30,000 Metres
Glass: (10,000 Units X 2 Square metres per unit)		20,000 Square Metres
Backing: (10,000 Units X 2 Square metres per unit)			20,000 Square Metres
Ending Inventory (150% of beginning inventory)	1,200 Metres	300 Metres	450 Metres
Quantity Required to be purchased (Ending Inventory + Quantity Required in Production - Beginning inventory)	30,400 Metres	20,100 Square Metres	20,150 Square Metres

Therefore the quantity of Framing, Glass and Backing required to be purchased during the month of December is 30,400 metres, 20,100 sqaure metres and 20,150 square metres respectively.

Answer b)

Calculation of total cost of raw material purchases during the month of December

	Framing	Glass	Backing	Total Cost
Quantity Required to be purchased   (A)	30,400 Metres	20,100 Square Metres	20,150 Square Metres
Current prices   (B)	$ 1.00 per metre	$ 5.00 per square metre	$ 3.00 per square metre
Cost of purchase   (A) x (B)	$30,400	$100,500	$60,450	$191,350

Therefore the total cost of raw material purchases during the month of December is $ 191,350