Yordi expects to produce 1,700 units in January and 2,148 units in February The

ID: 2567009 • Letter: Y

Question

Yordi expects to produce 1,700 units in January and 2,148 units in February The company budgets $45 per unit for direct materials, Indirect materials are insignificant and not considered for budgeang purposes The balance in the Raw Matenals Inventory account (all diredt materials) on January 1 is $45,500. Yordi desires the ending balance in Raw Matenals Inventory to De 20% of the next month's direct mate als Deeded for production Desired ending balance for February ts S50 300 Prepare Yord's dect matenas bud et for January and Febrary Begin by preparing the direct materials budget for January and February through total drect materials needed line and then complete the budget oy calculating the budgeted purchases of direct materials. Yordi Company Direct Materials Budget Two Months Ended January 31 and February January February Direct matenals cost per unt Direct mátenals needed for production Plas Total direct materials needed

Explanation / Answer

Yordi Company

Direct Materials Budget

Two Months ended January 31 and February 28

January

February

Budgeted units to be produced

1700

2148

Direct Materials cost per unit

Direct Materials needed for production

76500

96660

Plus: Desired Ending inventory of direct Materials (See notes)

19332

50300

Total direct Materials needed

95832

146960

20% of direct Materials needed for production in feb

20% of 96660