Production estimates for August are as follows: Estimated inventory (units), August 1 12,000 Desired inventory (units), August 31 9,000 Expected sales volume (units), August 75,000 For each unit produced, the direct materials requirements are as follows: Direct material A ($5 per lb.) 3 lbs. Direct material B ($18 per lb.) 1/2 lb. The total direct materials purchases (assuming no beginning or
ending inventory of material) of materials A and B required for August production is:
A) $1,080,000 for A; $1,296,000 for B
B) $1,080,000 for A; $648,000 for B
C) $1,125,000 for A; $675,000 for B
D) $1,170,000 for A; $702,000 for B
B
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