At a sales volume of 50 units, the budgeted direct materials cost for the company that sells its product for $3 per unit will be $90.
What are the direct materials costs?
Direct materials costs are the costs incurred by a manufacturer for the purchase of raw materials for production.
Direct materials costs are one class of the variable costs of production. Others include direct labor costs and variable overhead costs.
Data and Calculations:
Selling price = $3
Direct mateirals cost per unit = $1.80
Sales volume = 50 units
Thus, the direct materials cost will be $90.
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