Question

Coronado industries is planning to sell 1100 boxes of ceramic tile, with production estimated at 670 boxes during May. each box of tile requires 44 pounds of clay mix and a 0.5 hour of direct labor. clay mix costs 0.4 per pound and employees of the company are paid 14 per hour. manufacturing overhead is applied at a rate of 110% of direct labor costs. Coronado has 4400 pounds of clay mix in beginning inventory and wants to have 5000 pounds in ending inventory. what is the total amount to be budgeted in pounds for direct materials to be purchased for the month?

49000

30080

29480

28880

Answer 1

30080 Pounds

Explanation:

Estimated production of boxes of ceramic tile during may	670 boxes
Requirement of clay mix (direct material) for each box	44 pounds
Total requirement of clay mix during may for producing required number of boxes of ceramic tile	(670*44) = 29480 pounds
Beginning Inventory of clay mix (direct material)	4400 pounds
Desired Ending Inventory of clay mix (direct material)	5000 pounds

Statement of calculating budgeted amount of direct materials to be purchased for the month of May =

Direct materials required (29480 pounds + 5000 pounds)	34480 pounds
Less: Beginning inventory of direct materials	4400 pounds
Budgeted amount of direct materials Purchased	30080 pounds

Note: Direct material required = Desired ending inventory of direct materials + Direct materials required in Production of required number of ceramic tile.

Let's check the answer

Pàrticular	Pounds
Beginning Inventory of direct material	4400
Add: Purchase	30080
Total direct material	34480
LessDirect material used during the month of May	29,480
Ending inventory of direct material	5,000

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