Question
Saphire Company budgeted the following production in units for the second quarter of the year: April May June Units to be produced 45,000 38,000 42,000
Saphire Company budgeted the following production in units for the second quarter of the year:
| April | May | June |
Units to be produced | 45,000 | 38,000 | 42,000 |
Each unit of product requires 4 pounds of raw material that costs $5 per pound. Inventory policy requires that sufficient raw materials be in ending monthly inventory to satisfy 30% of the following months production needs.
The ending inventory policy was met in March (The inventory of raw materials at the beginning of April equals exactly the amount needed to satisfy the companys inventory policy.) The desired ending inventory for June is 60,000 pounds.
Based on the above information, prepare the companys direct materials purchase budget for April, May, and June and for the quarter in total.
Use the format provided on the Canvas homepage!
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