Your answer is partially correct. Try again. De\'Wit Industries has adopted the

Question

Your answer is partially correct. Try again. De'Wit Industries has adopted the fellowing production budget for the first 4 months of 2017 Honth Units January onth Units 10,470 March 8,470 Apri 5,440 4,340 Each unit requires 4 pounds or aw materials costing $4 per pound on December 31, 2016, the ending aw materials inventory was 8,376 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's production requirements Prepare a direct materials purchases budget by month for the first quarter

Explanation / Answer

DIRECT MATERIAL BUDGET JAN FEB MARCH Units to be produced 10470 8470 5440 Direct material per unit 4 4 4 Total pounds needed for production 41880 33880 21760 Add: Desired Ending Direct material 6776 4352 3472 (20% of next month requirement) (33880*20%) (21760*20%) (4340*4*20%) Total material required 48656 38232 25232 Less: Beginning opeaning inventory 8376 6776 4352 (Given) Direct material Purchase 40280 31456 20880 Cost per pound 4 4 4 Total cost of Material purchased in $ 161120 125824 83520

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