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24 January, 09:15

The direct materials budget shows: Desired ending direct materials 48,000 pounds Total materials required 69,000 pounds Direct materials purchases 63,200 pounds The total direct materials needed for production is a. 21,000 pounds. b. 5,800 pounds. c. 15,200 pounds. d. 132,200 pounds.

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  1. 24 January, 09:44
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    The total direct materials required for production are 21000 pounds. Thus, option a. 21000 pounds is the correct option.

    Explanation:

    The direct materials required value of 69000 pounds includes the direct materials that are required to meet this month's production requirement along with catering for the desired ending inventory of 48000 pounds. The value of total direct material required is adjusted for any kind of opening inventory and is the actual requirement for this period. Thus, the total direct materials that are needed for production for this period are,

    Production requirement-Direct material = Total direct material required - desired level of closing inventory

    Production requirement-Direct Material = 69000 - 48000 = 21000 pounds
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