Answer (D) is correct . During the first quarter, direct materials for 27,500 units of output were purchased for $2,200,000, or $80 per output unit ($2,200,000 ¡Â 27,500). (145000+25000-18500)*80
Given Answer (A) is incorrect because The original pro forma amount is $11,400,000.
Answer (B) is incorrect because The amount of $11,600,000 equals 145,000 units times $80.
Answer (C) is incorrect because The amount of $11,800,000 assumes that the final 80,000 units will be purchased at $80 per unit.
