Question

Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 616,000 units, estimated beginning inventory is 100,000 units, and desired ending inventory is 85,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A 0.50 lb. per unit @ $0.50 per pound Material B 1.00 lb. per unit @ $1.53 per pound Material C 1.20 lb. per unit @ $0.98 per pound The dollar amount of material A used in production during the year is Oa. $706,776 Ob. $150,250 Oc. $919,530 Od. $154,000

Answer 1

Particulars	Units
Budgeted sales	616,000 units
Add: Desired ending inventory	85,000 units
Less: Estimated Beginning inventory	(100,000 units )
Number of units Produced	601,000 Units
Dollar amount of Material A used in production            = Number of units Produced x Quantity per unit x Cost per pound           =   601,000 units x 0.50 lb. x $ 0.50 per pound	$ 150,250
Option (b) is Correct