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Marigold Corp's required production for June is 122,000 units. To make one unit of finished product, three pounds of direct material Z are required. The actual beginning and desired ending inventories of direct material Z are 300,000 and 330,000 pounds, respectively. How many pounds of direct material Z must be purchased?

Answer :

396,000 pounds of direct material Z must be purchased.

Giving the accompanying data:

Raw materials production needs 122000

Desired Ending Inventory 330,000

Beginning Inventory 300,000

To make one unit of a completed item, three pounds of direct material Z are required.

To ascertain the acquisition of direct material, we want to utilize the accompanying recipe:

Purchases= production + desired to end inventory - beginning inventory

Purchases= 122000*3 + 330,000 - 300,000

Purchases= 396,000 pounds

Hence , 396,000 pounds direct materials are purchased.

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