The budgeted direct materials of 108 correspond to which sales volume?

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Multiple Choice

The budgeted direct materials of 108 correspond to which sales volume?

Explanation:
Direct materials are tied to production through a standard usage per unit. The total budgeted materials equals the planned production volume multiplied by the standard materials required for each unit. Here, the budgeted amount is 108, so you back out the volume by dividing by the standard materials per unit. If the standard usage is 1.8 units of material per unit produced, then 108 ÷ 1.8 = 60 units. So the corresponding sales/production volume is 60. In other words, 60 units × 1.8 materials per unit gives the total budgeted direct materials of 108.

Direct materials are tied to production through a standard usage per unit. The total budgeted materials equals the planned production volume multiplied by the standard materials required for each unit. Here, the budgeted amount is 108, so you back out the volume by dividing by the standard materials per unit. If the standard usage is 1.8 units of material per unit produced, then 108 ÷ 1.8 = 60 units. So the corresponding sales/production volume is 60.

In other words, 60 units × 1.8 materials per unit gives the total budgeted direct materials of 108.

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