produces organic bread that is sold by the loaf. Each loaf requires

1/2

of a pound of flour. The bakery pays

$3.00

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:

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(Click the icon to view the units to be produced.) The bakery has a policy that it will have

10%

of the following month's flour needs on hand at the end of each month. At the end of June, there were

78

pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.

Begin the direct materials budget by determining the total quantity needed, then complete the budget. (Enter the pounds per unit as a decimal to two places. Round your calculations to the nearest whole number.)

July. . . . . . . . . . . . . . . . . . .

1,560 loaves

August. . . . . . . . . . . . . . . .

1,920 loaves

September. . . . . . . . . . . . .

1,740 loaves

October. . . . . . . . . . . . . . .

1,480 loaves

The Bakery at the Lake
Direct Materials Budget
For the Months of July through September
	July	August	September	Quarter
Units to be produced	1,560	1,920	1,740	5,220
Multiply by: Pounds of flour needed per unit	0.50	0.50	0.50
Quantity needed (lbs) for production
Plus: Desired ending inventory of direct materials
Total quantity (lbs) needed

Less: Beginning inventory of direct materials
Quantity (lbs) to purchase
Multiplied by : Cost per pound	$	$	$	$
Total cost of materials purchases