Question
Bramble, Inc. manufactures afghans. The budgeted units to be produced and sold are as follows: Expected Production Expected Sales August 3,400 3,100 September 3,000 4,100
Bramble, Inc. manufactures afghans. The budgeted units to be produced and sold are as follows:
| Expected Production | Expected Sales | ||||
|---|---|---|---|---|---|
| August | 3,400 | 3,100 | |||
| September | 3,000 | 4,100 |
It takes 18 yards of yarn to produce an afghan. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is $0.20 a yard. At August 1, 3,060 yards of yarn were on hand. Compute the budgeted cost of direct materials purchases for August.
| Budgeted cost of direct materials purchases for August | ||
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