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Miami Solar manufactures solar panels for industrial use. The company budgets production of 5,900 units (solar panels) in July and 6,100 units in August.

rev: 07_21_2021_QC_CS-270398

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 5,310 pounds of direct materials in inventory. Prepare the direct materials budget for July.

Required information Miami Solar manufactures solar panels for industrial use. The company budgets production of 5,900 units (solar panels) in July and 6,100 units in August. Each unit requires 3 pounds of direct materials, which cost $6 per pound. The company's policy is to maintain direct materials inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 5,310 pounds of direct materials in inventory. Prepare the direct materials budget for July. MIAMI SOLAR Direct Materials Budget Units to produce Materials required per unit (pounds) Materials needed for production (pounds) Add: Desired ending materials inventory Total materials required (pounds) Add: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials to be purchased Cost of direct materials purchases July 5,900 3 17,700 5,3101 23,010