Question
Miami Solar manufactures solar panels for industrial use. The company budgets production of 5,000 units (solar panels) in July and 5,300 units in August. Each
Miami Solar manufactures solar panels for industrial use. The company budgets production of 5,000 units (solar panels) in July and 5,300 units in August. Each unit requires 3 pounds of direct materials, which cost $6 per pound. The companys policy is to maintain direct materials inventory equal to 30% of the next months direct materials requirement. As of June 30, the company has 4,500 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July.
MIAMI SOLAR
Direct Material Budget
For mont Ended July 31
Budget production (units) | 5,000 |
Materials needed for production (lbs) | |
Total materils requirements (lbs) | |
Materials to be purchased (lbs) | |
Total cost of direct materials purchases |
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