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Save Donaldson Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. Donaldson Industries pays $3 for each
Save Donaldson Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. Donaldson Industries pays $3 for each computer chip. To help guard against stockouts of the computer chip, Donaldson Industries has a policy that states that the ending inventory of computer chips should be at least 30% of the following month's production needs. The production schedule for the first four months of the year is as follows: (Click the icon to view the production schedule.) Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget Donaldson Foods Direct Materials Budget For the Months of January through March January February March Quarter Units to be produced Quanty of direct materials needed per unit Quantity needed for production Desired ending inventory of direct materials Total quantity needed Less: Beginning inventory of direct materials Quantity to purchase Cost per unit Total cost of direct material purchases Production schedule Number of toys. to be purchased January 6.000 LIMMMM February 4 600 March 6 200 April 8.900 Print Done
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