Question
Muffin Man produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays $2.00 per
Muffin Man produces organic bread that is sold by the loaf. Each loaf requires
1/2
of a pound of flour. The bakery pays
$2.00
per pound of the organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months:
July. . . . . . . . . . . . . . . . . . .
1,540 loaves
August. . . . . . . . . . . . . . . .
1,820 loaves
September. . . . . . . . . . . . .
1,660 loaves
October. . . . . . . . . . . . . . .
1,460 loaves
The bakery has a policy that it will have
20%
of the following month's flour needs on hand at the end of each month. At the end of June, there were
154
pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.
For the Months of July through September August September Quarter July 1,540 Units to be produced 1,820 1,660 5,020 0.50 0.50 0.50 0.50 Multiply by: Pounds of flour needed per unit Quantity needed (lbs) for production 770 910 830 2,510 182 166 146 146 952 1,076 976 2,656 Plus: Desired ending inventory of direct materials Total quantity (lbs) needed Less: Beginning inventory of direct materials Quantity (lbs) to purchase Multiply by: Cost per pound Total cost of direct material purchases Enter any number in the edit fields and then click CheckStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started