Picture Pretty manufactures picture frames. Sales for August are expected to be
ID: 2350520 • Letter: P
Question
Picture Pretty manufactures picture frames. Sales for August are expected to be 10,000 units of various sizes. Historically, the average frame requires four feet of framing, one square foot of glass, and two square feet of backing. Beginning inventory includes 1,500 feet of framing, 500 square feet of glass, and 500 square feet of backing. Prices are $0.30 per foot of framing, $6.00 per square foot of glass, and $2.25 per square foot of backing. Ending inventory should be 150% of beginning inventory. Purchases are paid for in the month acquired.Question 1: Determine the quantity of framing, glass, and backing that is to be purchased during August. (five points)
Question 2: Determine the total costs of direct materials for August purchases. (five points)
Explanation / Answer
a. Framing Glass Backing
Desired ending inventory* 2,250 750 750
Production needs (10,000 units)** 40,000 10,000 20,000
Total needs 42,250 10,750 20,750
Less: Beginning inventory 1,500 500 500
Purchases planned 40,750 10,250 20,250
*1,500 x 1.5 = 2,250
500 x 1.5 = 750
**10,000 x 4 = 40,000
10,000 x 1 = 10,000
10,000 x 2 = 20,000
b. Cost of direct materials:
Framing (40,750 x $0.30) $12,225.00
Glass (10,250 x $6.00) 61,500.00
Backing (20,250 x $2.25) 45,562.50
Total $119,287.50