Production estimates for July for Starling Co. are as follows: Estimated inventory (units), July 1 8,500 Desired inventory (units), July 31 10,500 Expected sales volume (units), July 76,000 For each unit produced, the direct materials requirements are as follows: Material A ($5 per lb.) 3.0 lbs. Material B ($18 per lb.) 0.5 lb. The total direct materials purchases of Materials A and B (assuming no beginning or ending materials inventory) required for July production is a.$1,125,000 for A; $675,000 for B b.$1,080,000 for A; $1,296,000 for B c.$1,170,000 for A; $702,000 for B d.$1,080,000 for A; $648,000 for B
Production estimates for July for Starling Co. are as follows: Estimated inventory (units), July 1 8,500 Desired inventory (units), July 31 10,500 Expected sales volume (units), July 76,000 For each unit produced, the direct materials requirements are as follows: Material A ($5 per lb.) 3.0 lbs. Material B ($18 per lb.) 0.5 lb. The total direct materials purchases of Materials A and B (assuming no beginning or ending materials inventory) required for July production is a.$1,125,000 for A; $675,000 for B b.$1,080,000 for A; $1,296,000 for B c.$1,170,000 for A; $702,000 for B d.$1,080,000 for A; $648,000 for B
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Production estimates for July for Starling Co. are as follows:
| Estimated inventory (units), July 1 | 8,500 |
| Desired inventory (units), July 31 | 10,500 |
| Expected sales volume (units), July | 76,000 |
For each unit produced, the direct materials requirements are as follows:
| Material A ($5 per lb.) | 3.0 lbs. |
| Material B ($18 per lb.) | 0.5 lb. |
The total direct materials purchases of Materials A and B (assuming no beginning or ending materials inventory) required for July production is
a.$1,125,000 for A; $675,000 for B
b.$1,080,000 for A; $1,296,000 for B
c.$1,170,000 for A; $702,000 for B
d.$1,080,000 for A; $648,000 for B
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