Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 4

Ajax Manufacturing produces a single product, which takes 8.0 pounds of direct materials per unit produced. We are currently at the end of the first quarter of the year and there are 50,000 pounds of material on hand. The company's policy is to maintain an end-of-quarter inventory of materials equal to 25% of the following quarter's material requirements for production. How many units of product were produced in the first quarter of the year Under the assumption that production will increase by 10% in the second quarter, what are the direct materials requirements (in pounds) for planned production in the second quarter