Lion Industries required production for June is 132,000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 300,000 and 330,000 pounds, respectively. How many pounds of direct material Z must be purchased?
Required production for June = 132,000 units
1 Unit of finished product = 3 pounds of Z required
Required pounds of Z for 132,000 units = 132,000 × 3 = 396,000 pounds of Z
Total raw material Z pounds used during the June = Beginning inventory + Total purchases Z – Ending Inventory
396,000 = 300,000 + total purchase Z – 330,000
396,000 = Purchase of Z – 30,000
Required Total pounds purchases during june = 396,000 + 30,000 = 426,000 Pounds