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Ajax Manufacturing produces a single product, which takes 8.0 pounds of direct material per unit produced. The company's policy is to maintain an end-of-quarter
Ajax Manufacturing produces a single product, which takes 8.0 pounds of direct material per unit produced. The company's policy is to maintain an end-of-quarter inventory of materials equal to 25 percent of the following quarter's material requirements for production. At the end of the 4th quarter, there were 50,000 pounds of material on hand. Assume it is currently the end of the first quarter of the new year. a. How many units of product were produced this quarter? b. Under the assumption that production will increase by 10% in the second quarter, what are the direct material requirements (in pounds) for planned production in the second quarter? a. Product produced units b. Direct materials requirements lbs.
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