Rida, Inc., a manufacturer in a seasonal industry, is preparing its direct materials budget for the second
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Question:
Rida, Inc., a manufacturer in a seasonal industry, is preparing its direct materials budget for the second quarter. It plans production of 228,000 units in the second quarter and 265,500 units in the third quarter. Raw material inventory is 55,500 pounds at the beginning of the second quarter. Other information follows:
Direct materials | Each unit requires 0.70 pounds of a key raw material, priced at $178 per pound. The company plans to end each quarter with an ending inventory of materials equal to 50% of next quarters budgeted materials requirements. | |
Prepare a direct materials budget for the second quarter.
RIDA INC. Direct Materials Budget Second Quarter Units to be produced Materials requirement per unit Materials needed for production (pounds) Materials requirement per unit Total materials requirements (pounds) 228,000 units 0.70 pounds 0 159,600 pounds Materials to be purchased (pounds) Budgeted cost of direct materials purchases
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