Electro Company budgets production of 560,000 transmissions in the second quarter and 635,000 transmissions in the...

 

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Electro Company budgets production of 560,000 transmissions in the second quarter and 635,000 transmissions in the third quarter. Each transmission requires 0.8 pounds of a key raw material. Electro Company aims to end each quarter with an ending inventory of direct materials equal to 20% of next quarter's budgeted materials requirements. Beginning inventory of this raw material is 89,600 pounds. Direct materials cost $1.81 per pound. Prepare a direct materials budget for the second quarter. ELECTRO COMPANY Direct Materials Budget Budgeted production (units) Second Quarter Materials requirements per unit Materials needed for production (lbs.) Materials to be purchased Total materials requirements (lbs.) Budgeted beginning inventory (lbs) Materials to be purchased (lbs.) Budgeted ending inventory (lbs) Total cost of direct materials purchases 560,000 units Electro Company budgets production of 560,000 transmissions in the second quarter and 635,000 transmissions in the third quarter. Each transmission requires 0.8 pounds of a key raw material. Electro Company aims to end each quarter with an ending inventory of direct materials equal to 20% of next quarter's budgeted materials requirements. Beginning inventory of this raw material is 89,600 pounds. Direct materials cost $1.81 per pound. Prepare a direct materials budget for the second quarter. ELECTRO COMPANY Direct Materials Budget Budgeted production (units) Second Quarter Materials requirements per unit Materials needed for production (lbs.) Materials to be purchased Total materials requirements (lbs.) Budgeted beginning inventory (lbs) Materials to be purchased (lbs.) Budgeted ending inventory (lbs) Total cost of direct materials purchases 560,000 units

Answer rating: 100% (QA)

To prepare the direct materials budget for the second quarter we need to follow these steps 1 Calculate the materials required for production 2 Determ... View the full answer