Six feet of nylon material are required for each dog leash. The cost of the nylon is $1.09/foot. The desired raw materials inventory at the end of a month is 40% of the following month's production needs.
Assume 112,00 units of raw materials inventory will be on hand at the beginning of January. Also, assume 70,300 units of finished goods will be produced in April.
Instructions: Prepare a direct materials budget for the first quarter.
		Dogs R Us
		Direct Materials Budget
		For the Quarter Ended March 31
		January	February	March	Quarter
Required production in units of finished goods	45,750	50,750	57,250	153,750
Units of raw material per unit of finished good
Units of raw material needed
Plus desired units of ending raw materials inventory
Total units of raw material needed
Less desired units of beginning raw materials inventory
Units of raw material to be purchased
Cost of raw material per pound
Cost of raw material to be purchased
Accounts Payable on January 1 was $203,400. All of this amount will be paid in January. The company pays for 25% of its purchases in the month of the purchase and 75% in the month following the purchase.
Instructions: Prepare a schedule of expected cash disbursements for purchases for January, February, and March. Also, determine the
accounts payable balance for the quarter ended March 31.
		Dogs R Us
		Schedule of Expected Cash Disbursements for Purchases of Materials
		For the Quarter Ended March 31
		January	February	March	Quarter
3/31 Accounts Payable =
Assume each unit required .3 direct labor hours and each employee is paid $12.00 per hour.
Instructions: Prepare a direct labor budget for the first quarter.
		Dogs R Us
		Direct Labor Budget
		For the Quarter Ended March 31
		January	February	March	Quarter
Manufacturing overhead is allocated on the basis on direct labor hours. The variable overhead rate is $2.25 per direct labor hour and the fixed overhead is $33,750 per month.
The fixed overhead includes depreciation of $8,825 per month.
Instructions: Prepare a manufacturing overhead budget for the first quarter and determine the predetermined overhead rate.
		Dogs R Us
		Manufacturing Overhead Budget
		For the Quarter Ended March 31
		January	February	March	Quarter
Predetermined overhead rate =