Question
Qwerty Corp. has the following standard cost sheet: Direct Materials 8 gallons @ $ 5.00 per gallon Direct Labor 4 DLH @ $18.00 per DLH
- Qwerty Corp. has the following standard cost sheet:
Direct Materials 8 gallons @ $ 5.00 per gallon
Direct Labor 4 DLH @ $18.00 per DLH
Variable MOH 5 MHR @ $50.00 per MHR
Fixed MOH 5 MHR @ $80.00 per MHR
As of January 1st, projected sales volume is 30,000 units for January, 50,000 units for February, 40,000 units for March, 30,000 units for April, and 40,000 units for May. Qwerty has 5,000 units of finished goods and 40,000 gallons of direct materials in beginning inventory. Each month, Qwerty wants to have finished goods inventory of 20% of the following months expected sales, and direct materials inventory of 30% of the following months direct materials production needs. Calculate Qwertys forecast direct materials purchases in dollars for March.
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