DeWitt Industries has adopted the following production budget for the first 4 mo

Question

DeWitt Industries has adopted the following production budget for the first 4 months of 2017 anuary February 10,270 March 8,270 April 5,390 4,290 Each unit requires 3 pounds o raw materials costing S3 per pound. On December 31, 2016, the ending ra materials inventory as 6 1?2 po ds Management ar ts to have a raw materials inventory at the e d 0 the month equal to 20% of next month's Prepere a direct materials purchases budget by month for the first quarter DEWITT INDUSTRIES Direct Materials Purchases Budget Units to be Produced Total Pounds Needed for Production Desired En Direct Materials Total Materials Required inning Direct Materials Direct Materials Purchases Total Cost of Direct Materials Purchases

Explanation / Answer

SOLUTION

DEWITT INDUSTRIES

Direct Materials Purchases Budget

For the Quarter Ending March 31, 2017

*20% of next month’s production needs.

January February March Units to be produced 10,270 8,270 5,390 Direct materials per unit 3 3 3 Total pounds needed for production 30,810 24,810 16,170 Add: Desired ending direct materials* 4,962 3,234 2,574 Total materials required 35,772 28,044 18,744 Less: Beginning direct materials 6,162 4,962 3,234 Direct materials purchases 29,610 23,082 15,510 Cost per pound $3 $3 $3 Total cost of direct materials purchases 88,830 69,246 46,530

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