Question : How do i calculate the desired ending material for q4 in the material usage budget?

D Limited is preparing its annual master budget for the year to 31 December 2024. It manufactures and sells one product, which has a selling price of 150. The marketing director believes that the price can be increased to 160 with effect from 1 July 2024 and that at this price the sales volume for each quarter will be as follows:

Quarters	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Sales Volume (units)	40,000	50,000	30,000	45,000

Each unit of the finished product which is manufactured requires four units of component R and three units of component T, together with a body shell S. These items are purchased from an outside supplier. Currently, prices are:

Component R: 8.00 each

Component T: 5.00 each

Shell S: 30.00 each

The components are expected to increase in price by 10% with effect from 1 April 2024; no change is expected in the price of the shell S. Assembly of the shell and components into the finished product requires three labor hours: labor is currently paid at 10.00 per hour. A 4% increase in wage costs is anticipated to take effect from 1 October 2024. Variable overhead costs are expected to be 10 per unit for the whole of the year; fixed production overhead costs are expected to be 240,000 for the year and are absorbed on a per-unit basis.

Opening stocks are expected to be as follows:

Finished Units: 9,000 units

Component R: 3,000 units

Component T: 5,500 units

Shell S: 500 units

Closing stocks at the end of each quarter are expected to be as follows:

Finished Units: 10% of next quarters sales

Component R: 20% of next quarters production requirements

Component T: 15% of next quarters production requirements

Shell S: 10% of next quarters production requirements

		Material usage budget for componenent R
	Q1	Q2	Q3	Q4	Year
Required production units	36,000	48,000	31,500	44,500	160,000
Component R units required per product	4	4	4	4
Total material needed	144,000	192,000	126,000	178,000	640,000
Add: Desired ending materials	38400	25200	35600
		Material usage budget for componenent T
	Q1	Q2	Q3	Q4	Year
Required production units	36,000	48,000	31,500	44,500	160,000
Component T units required per product	3	3	3	3
Total material needed	108,000	144,000	94,500	133,500	480,000
Add: Desired ending materials	21600	14175	20025
		Material usage budget for Shell S.
	Q1	Q2	Q3	Q4	Year
Required production units	36,000	48,000	31,500	44,500	160,000
Shell S.units required per product	1	1	1	1
Total material needed	36,000	48,000	31,500	44,500	160,000
Add: Desired ending materials	4800	3150	4450