Marshall Publishers Inc. A budget of estimated unit production.budgeted producti

Question

Marshall Publishers Inc. A budget of estimated unit production.budgeted production of 34,000 diaries in 2016. Paper is required to produce a diary. Assume 80 square yards of paper are required for each diary. The estimated January 1, 2016, paper inventory is 190,000 square yards. The desired December 31, 2016, paper inventory is 95,000 square yards.

If paper costs $0.07 per square yard, determine the direct materials purchases budget for 2016. If required, round your final answer to the nearest dollar.
$________

Explanation / Answer

a Number of Units 34000 b Paper in sq yard per unit 80 c Paper in sq yard for 34000 units 2720000 c Inventory units used in Production 2720000 d Opening Inventory Units 190000 e Closing inventory Units 95000 f Inventory Units Purchased during period ( c+e-d) 2625000 g Cost per unit of Raw material 0.07 H Cost of Inventory Purchased budget 2016 ( f x g ) 183750

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