Production Estimates for July Are as Follows: for Each

question 127

Multiple Choice

Production estimates for July are as follows: For each unit produced, the direct materials requirements are as follows:
The total direct materials purchases of materials A and B (assuming no beginning or ending material inventory) required for July production is:

• A) $1,080,000 for A; $648,000 for B
• B) $1,080,000 for A; $1,296,000 for B
• C) $1,170,000 for A; $702,000 for B
• D) $1,125,000 for A; $675,000 for B

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Definitions:

Raw Materials

Basic materials that are used in the production process to manufacture goods, often transformed into final products or component parts.

Production

The process of creating goods and services, involving both the conversion of raw materials into finished products and the creation of value.

Year Ended

The conclusion of a 12-month accounting period, at which financial statements are prepared to summarize the year's transactions.

Direct Materials Used

The cost of raw materials that are directly involved in the production of goods.