Question
Marx Industrial has estimated that production for the next five quarters will be: Production Information 1st quarter, 201739,000 units 2nd quarter, 201735,000 units 3rd quarter,
Marx Industrial has estimated that production for the next five quarters will be:
Production Information
1st quarter, 201739,000 units
2nd quarter, 201735,000 units
3rd quarter, 201742,000 units
4th quarter, 201734,000 units
1st quarter, 201841,000 units
Finished units of production require 10 pounds of raw material per unit. The raw material cost is $3 per pound. There is $117,000 of raw material on hand at the beginning of the first quarter, 2017. Marx desires to have 10 percent of next quarter's material requirements on hand at the end of each quarter.
Prepare quarterly direct materials purchases budgets for Marx Industrial for 2017.
MarxIndustrial
Direct Materials Purchases Budget
For the Year Ending December 31, 2017
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Units to be produced ________________ ________________ _______________ _______________ ________________
Cost of raw material per unit $______________ $_______________ $______________ $______________ $______________
Cost of raw material needed for production ________________ ________________ _______________ _______________ ________________
(Add) Desired ending inventory of raw material ________________ ________________ _______________ _______________ ________________
Total material needed ________________ ________________ _______________ _______________ ________________
(Less) Beginning inventory of raw material ________________ ________________ _______________ _______________ ________________
Required raw material purchases $________________ $________________ $ _______________ $_______________ $________________
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