2. Royal Company is preparing budgets for the quarter ending June 30th At Royal Company, five pounds of material are required per unit of product. Management wants materials on hand at the end of each month equal to 10% of the following months production. On March 31, 13,000 pounds of material are on hand. Prepare the direct materials budget. -How much materials should be purchased in May? a. 221,500 pounds b. 240,000 pounds c. 230,000 pounds d. 211,500 pounds

	April	May	June	Quarter	July
Production	26,000 Units	46,000 units	29,000 units		23,000 units
Materials per unit (pounds):
Production Needs:
Add: Desired ending inventory
Total needed
Less: Beginning Inventory
Materials to be purchased

2. Morie Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.75 direct labor-hours. The direct labor rate is $8.10 per direct labor-hour. The production budget calls for producing 2,000 units in March and 2,300 units in April. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 1,760 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months?

a. $28,512.00 b. $26,406.00 c. $28,228.50 d. $26,122.50

	March	May
Required Production in Untis	2,000	2,300
Direct Labor Time per unit (hours)
Total Direct Labor-Hours Needed
Regular Hours Paid
Overtime Hours Paid
Wages for Regular Hours
Overtime WagesL
Total Direct Labor Cost
Total: