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Dallas Industries has adopted the following production budget for the first 4 months of 2014. Month Units January 10,000 February 8,000 March 5,000 April 4,000
Dallas Industries has adopted the following production budget for the first 4 months of 2014.
Month Units January 10,000
February 8,000
March 5,000
April 4,000
Each unit requires 2 pounds of raw materials costing $2 per pound. On December 31, 2013, the ending raw materials inventory was 4,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next months production requirements.
Instructions
Prepare a direct materials purchases budget by month for the first quarter.
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