Legalos Company makes and sells a single product. It takes seven pounds of direc

Question

 Legalos Company makes and sells a single product. It takes seven pounds of direct materials to produce one unit of this product. Budgeted production for the next three months is given below:                    Budgeted Units to be Produced             February                  18,500 units March                     19,200 units April                     14,300 units  The company wants to maintain monthly ending inventories of direct materials that are equal to 45% of the following month's production needs. The cost of direct materials is $1.60 per pound.  Calculate the total cost of direct materials budgeted to be purchased in February.

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars February March April Budgeted Units to be Produced                  18,500.00                 19,200.00                 14,300.00 Pounds per unit                           7.00                            7.00                            7.00 Materials required for production              129,500.00               134,400.00               100,100.00 Ending raw materials = 45% of next month production                60,480.00                 45,045.00 Total direct materials required              189,980.00               179,445.00 Beginning Raw materials = 45%*Same month                58,275.00                 60,480.00 Total raw materials to be purchased                131,705.00               118,965.00 Price per pound                           1.60                            1.60 Cost of direct materials              210,728.00               190,344.00

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