adirect materials budget for the first quarter that shows both the number of rec

Question

adirect materials budget for the first quarter that shows both the number of rect mat Preouter chips needed and the dollar amount of the purchases in the budget. Production and direct materials budgets (Learning Objective 2) e Manufacturing produces self-watering planters for use in upscale retail estab- orne ichments. Sales projections for the first five months of the upcoming year show the esti- mated unit sales of the planters each month to be as follows: Number of planters to be sold 3,400 3,800 3,300 4,900 4,600 January February.. March.. April May.. Inventory at the start of the year was 850 planters. The desired inventory of planters at the end of each month in the upcoming year should be equal to 25% of the following month's budgeted sales. Each planter requires three pounds of polypropylene (a type of plastic). The company wants to have 20% of the polypropylene required for next month's production on hand at the end of each month. The polypropylene costs $0.20 per pound.

Explanation / Answer

1. Production budget :

Direct material budget :

January February March Quarter Sales unit 3400 3800 3300 10500 Add: Desired ending inventory 950 825 1225 1225 Total needs 4350 4625 4525 11725 Less: Beginning inventory (850) (950) (825) (850) Production units 3500 3675 3700 10875

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