Sacco Industries manufactures a popular interactive stuffed animal for children

Question

Sacco Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stock outs of the computer chip, Sacco Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: l (Click the icon to view the production schedule.) Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Sacco Industries Direct Materials Budget For the Months of January through March January February Quarter Data Table Units to be produced Multiply by: Quantity of direct materials needed per unit Quantity needed for production Plus: Desired ending inventory of direct materials Total quantity needed Less: Beginning inventory of direct materials Quantity to purchase Multiply by: Cost per unit Total cost of direct material purchases Stuffed animals to be 5,600 4,800 4,200 4,000 Print Done

Explanation / Answer

Sacco Industries Direct Material Budget For the month of January through March January February March Quarter Units to be produced               5,600                   4,800              4,200           14,600 Multioly by: Quantity of Direct material needed per unit                       3                          3                      3 Quantity needed for production             16,800                14,400            12,600           43,800 Plus : Desired ending inventory               3,600                   3,150              3,000 Less: Beginning inventory of direct materials                      -                   (3,600)            (3,150) Quantity to purchase             20,400                21,150            18,750           60,300 Multioly by: Cost per unit ( $ )                       2                          2                      2 Total cost of direct material purchase ( $ )             40,800                42,300            37,500        120,600

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.