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How to find the direct materials Budget ?? Golden Stars Company ls preparing its master budget for 2020. Relevant data pertaining to lts sales, productlon,
How to find the direct materials Budget ??
Golden Stars Company ls preparing its master budget for 2020. Relevant data pertaining to lts sales, productlon, and direct materlals budgets ere as follows: Sales: Sales for the year are expected to total 1,600,000 unlts. Quarterly sales are 20\%, 30%,20%, and 30% respectively. The sales price Is expected to be $55 per unit for the first three quarters and $65 per unit beginning in the fourth quartar. Sales in the first quarter of 2021 are expected to be 15% higher than the budgeted sales for the first quarter of 2020. Productlon: Management desines to malntain ending finished goods inventorles at 25% of next quarter's budgated sales volume. Direct materials: Each unlt requires 3 pounds of raw materials at a cost of $5 per pound. Management desires to maintaln raw materials inventories at 5% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2021 are 1,100,000 pounds. Direct Labour: Two hours of direct labor are required to produce each unit of finished goods. The anticlpated hourty wage rate is $12. The manufacture of each product requires 2 pounds of raw materials, and the expected cost per pound is $4. Assume that the desired ending direct materials amount is 1,020 pounds for the fourth quarter of 2020. Beginning direct material is 620 pounds for the first quarter of 2020. Prepare the
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