DSP Products Inc. makes and sells boat tarps. The Purchasing Manager has prepare
ID: 2480315 • Letter: D
Question
DSP Products Inc. makes and sells boat tarps. The Purchasing Manager has prepared the production budget for the second quarter of 2013 as follows:
April......2,500 units
May......4,000 units
June.....6,800 units
Production for both July and August are expected to be 7,000 units each. Each completed unit of finished product requires 50 yards of heavy duty plastic material which cost $1.40 per yard. The company has determined that it needs 15% of next month's raw material needs on hand at the end of each month. The company had 18,750 yards of plastic material on hand at the end of March.
It is the company's policy to pay for one-half of the month direct materials purchases in the month of purchase and the remainder in the following month.
Required: prepare a direct materials purchases budget for the second quarter of 2013.
DSP Products Inc.
Direct Materials Purchases Budget
Quarter Ending June 30
___April__ _____May____ ____June____ ____Total____ Required Prodution Plastic Needed Per Unit (yds) Material Needed For Production (yds) Desired Ending Balance Total Budgeted Projected Needs (yds) (Less) Beginning Direct Materials Material To Be Purchased (yds) Cost Per Yard Projected Direct Materials PurchasesExplanation / Answer
___April__ _____May____ ____June____ ____Total____ Required Prodution 2500 4000 6800 13,300 Plastic Needed Per Unit (yds) 50 50 50 Material Needed For Production (yds) 125,000 200,000 340,000 665,000 Desired Ending Balance 15%of 200,000 15%of 340,000 15%of 350,000 Total Budgeted Projected Needs (yds) 30,000 51,000 52,500 133,500 (Less) Beginning Direct Materials 18,750 30,000 51,000 99,750 Material To Be Purchased (yds) 11,250 21,000 1,500 33,750 Cost Per Yard $1.4 $1.4 $1.4 Projected Direct Materials Purchases $15,750 $29,400 $2,100 $47,250
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