llas Industries has adopted the following production budget for the first 4 mont
ID: 2452850 • Letter: L
Question
llas Industries has adopted the following production budget for the first 4 months of 2014.
Month
Units
Month
Units
Each unit requires 4 pounds of raw materials costing $3 per pound. On December 31, 2013, the ending raw materials
inventory was 9,440 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month’s production requirements.
Prepare a direct materials purchases budget by month for the first quarter.
how do i get ??desired ending for direct materials
Month
Units
Month
Units
January 10,380 March 5,450 February 8,160 April 4,230Explanation / Answer
Direct Materials Purchases Budget(In Pounds) for 1st quarter ending 31st March,2014
January february March
Production In Units 10380 8160 5450
Direct material used for production 41520 32640 21800
Add: Ending Direct material in Units 6528 4360 3384
Less:Begining Direct material in Units 9440 6528 4360
Material to be purchased 38608 30472 20824
Material to be purchased ($) $115824 $91416 $62472
Note: Direct material used for production
January february March Direct material used for production 10380*4 8160*4 5450*4
41520Pounds 32640Pounds 21800 Pounds
Ending Direct material in Units
January february March
20% * next month requirement 20%*32640 20%*21800 20%* (4230*4)
Ending Direct material in Units 6528 4360 3384
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.