Problem:
1. The following data on production, materials required for products X and Y, and inventory pertain to the budget of LMN Company:
| |
Product X
|
Product Y
|
|
Production (units)
|
2,000
|
3,000
|
|
Materials (units)
|
|
|
|
A
|
3.0
|
3,000
|
|
B
|
4.0
|
6.5
|
| |
Beginning
|
Desired Ending
|
Price/Unit
|
|
Materials inventory:
|
|
|
|
|
A
|
2,000
|
3,000
|
$2
|
|
B
|
6,000
|
6,000
|
1.20
|
(a) Determine the number of material units needed to produce products X and Y.
(b) Calculate the cost of materials used for production.
(c) Determine the number of material units to be purchased.
(d) Calculate the cost of materials to be purchased.