Haft construction company determines that 54,000 pounds of direct materials are needed for production in july. there are 3,200 pounds of direct materials on hand at july 1 and the desired ending inventory is 2,800 pounds. if the cost per unit of direct materials is $3, what is the budgeted total cost of direct materials purchases?

cost of direct materials purchases   160,800

Explanation:

pounds required for production      54,000

desired ending inventory                    2,800

total needs                                         56,800

beginning inventory                           (3,200)

units to be purchased                        53,600

cost per unit of direct materials                  3

cost of direct materials purchases   160,800

Notes:

The pounds for production and the ending inventory are the raw materials demand.

The beginning inventory is a portion we already have, so we need to purchase less.

Then, we multiply the pounds to be purchased by their cost to get the total cost for direct materials

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