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DeWitt Industries has adopted the following production budget for the first 4 months of 2017. Months Units Months Units January 10,340 March 5,440 February 8,480
DeWitt Industries has adopted the following production budget for the first 4 months of 2017.
Months | Units | Months | Units | |||
---|---|---|---|---|---|---|
January | 10,340 | March | 5,440 | |||
February | 8,480 | April | 4,230 |
Each unit requires 3 pounds of raw materials costing $4 per pound. On December 31, 2016, the ending raw materials inventory was 9,150 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's production requirements. Prepare a direct materials purchases budget by month for the first quarter. DEWITT INDUSTRIES Direct Materials Purchases Budget For the Quarter Ending March 31, 2017 - January February March 8 8,480 5 ,440 Direct Materials Per Unit Units to be produced Direct Materials Per Unit Total Pounds Needed for Production 3 10,340 C 3 3,20 ,480 3 25,420 Total Pounds Needed for Production - 31,020 25,440 16,320 Add : Desired Ending Direct Materials 5,088 3,264 2,538 Total Materials Required . 36,108 28,704 18,858 Less 4: Beginning Direct Materials 9,150 ( 8,480 5,440 Total Materials Required Less : Beginning Direct Materials Direct Materials Purchases Cost Per Pound 36,108 9,150 i 26,958 4 28,704 8.480 20,224 4$ [ 20,224 13,418 C $ ta Total Cost of Direct Materials Purchases - 107,832 GA 80,896 ta 53,672
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