Brown Inc.\'s production budget for Product X for the year ended December 31 is

Question

Brown Inc.'s production budget for Product X for the year ended December 31 is as follows:

In Brown's production operations, Materials A, B, and C are required to make Product X. The quantities of direct materials expected to be used for each unit of product are as follows:

Product X
Material A .50 pound per unit
Material B 1.00 pound per unit
Material C 1.20 pound per unit

The prices of direct materials are as follows:
Material A $0.60 per pound
Material B $1.70 per pound
Material C $1.50 per pound

Prepare a direct materials purchases budget for Product X. Enter all answers as positive amounts.

Product X   Sales 640,000 units Plus desired ending inventory 85,000 Total 725,000 Less estimated beginning inventory, Jan. 1 90,000 Total production 635,000

Explanation / Answer

Answer:-

Brown Inc. Direct Material Purchase budget for Product X Materials Particluars A B C Total Production units (a) 635000 635000 635000 1905000 No. pounds required per unit (b) .50 pound per unit 1.00 pound per unit 1.20 pound per unit No. of pounds required (c=a*b) 317500 635000 762000 Direct material price per pound (d) $.60 per pound $1.70 per pound $1.50 per pound Direct material purchase $ (e=c*d) 190500 1079500 1143000 2413000

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