High School

Waterway Industries' required production for June is 172,000 units. To make one unit of finished product, three pounds of direct material Z are required. The actual beginning inventory and desired ending inventory of direct material Z are 350,000 and 380,000 pounds, respectively.

How many pounds of direct material Z must be purchased?

A. 528,000
B. 498,000
C. 546,000
D. 516,000

Answer :

Waterway Industries needs to purchase 546,000 pounds of direct material Z for their June production, accounting for beginning and ending inventory levels.Therefore the correct answer is C

The question revolves around the calculation of the quantity of direct material Z that must be purchased by Waterway Industries for their production requirements in June. The company's production target is 172,000 units, and each unit requires three pounds of direct material Z. Given the actual beginning and desired ending inventories, we can calculate the necessary purchase quantity as follows:

  • Total material needed for production = Number of units imes Pounds per unit = 172,000 units imes 3 pounds/unit = 516,000 pounds
  • Net material required = Total material needed - Beginning inventory + Ending inventory = 516,000 pounds - 350,000 pounds + 380,000 pounds = 546,000 pounds

Therefore, Waterway Industries must purchase 546,000 pounds of direct material Z. The correct answer is option c. 546,000 pounds.