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Ivanhoe Industries has adopted the following production budget for the first 4 months of 2022. Month Units Month Units January 8,600 March 4,300 February 6,880
Ivanhoe Industries has adopted the following production budget for the first 4 months of 2022.
Month | Units | Month | Units | |||
---|---|---|---|---|---|---|
January | 8,600 | March | 4,300 | |||
February | 6,880 | April | 3,440 |
Each unit requires 2 pounds of raw materials costing $3 per pound. On December 31, 2021, the ending raw materials inventory was 3,440 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next months production requirements. Prepare a direct materials purchases budget by month for the first quarter.
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