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    Planned Production and Direct Material Purchases Budgeting

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    David company expects to sell 25,000 units.

    Each unit requires:

    5 pounds of direct material at $10 per pound
    2 direct labor hours at $12 per direct labor hour

    The manufacturing overhead rate is $8 per direct labor hour.

    The beginning inventories are as follows:

    Direct materials: 5,000 pounds
    Finished goods: 3,500 units

    The planned ending inventories are as follows:

    Direct materials: 6,000 pounds
    Finished goods: 2,500 units

    Required:

    1. What is the planned production?

    2. What are the required direct material purchases for the planned production?

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    https://brainmass.com/business/accounting/planned-production-direct-material-purchases-budgeting-371995

    Solution Preview

    Required:

    1. What is the planned production?

    Planned production=

    =Sales+Closing stock of finished goods-Opening ...

    Solution Summary

    This solution helps with a problem about accounting.

    $2.19

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