Answer (D) is correct . Jordan needs 27,000 pounds (3 × 9,000 units) of materials for March production. It also needs 43,700 pounds {[(3 × 12,000 units to be produced in April) × 120%] + 500} for ending inventory. Given a beginning inventory of 32,900 pounds {[(3 × 9,000 units to be produced in March) × 120%] + 500}, required purchases equal 37,800 pounds (27,000 pounds + 43,700 pounds – 32,900 pounds).
Answer (A) is incorrect because The usage for March is 27,000 pounds.
Answer (B) is incorrect because The beginning inventory is 32,900 pounds.
Answer (C) is incorrect because The usage for April is 36,000 pounds.
|
How much direct materials should Jordan Auto purchase in March?
