Question
The Bakery at the Lake Direct Materials Budget For the Months of July through September July August September Quarter Units to be produced 1,540 1,900
The Bakery at the Lake | ||||
Direct Materials Budget | ||||
For the Months of July through September | ||||
| July | August | September | Quarter |
Units to be produced | 1,540 | 1,900 | 1,700 | 5,140 |
Multiply by: Pounds of flour needed per unit | 0.50 | 0.50 | 0.50 | 0.50 |
Quantity needed (lbs) for production | 770 | 950 | 850 | 2,570 |
Plus: Desired ending inventory of direct materials | 190 | 170 | 154 | 154 |
Total quantity (lbs) needed | 960 | 1,120 | 1,004 | 2,724 |
Less: Beginning inventory of direct materials |
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Quantity (lbs) to purchase |
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Multiply by: Cost per pound |
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Total cost of direct material purchases |
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The Bakery at the Lake produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays $3.50
per pound of the organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months
The bakery has a policy that it will have20% of the following month's flour needs on hand at the end of each month. At the end of June, there were154
pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.
July. . . . . . . . . . . . . . . . . . . | 1,540 loaves |
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August. . . . . . . . . . . . . . . . | 1,900 loaves |
September. . . . . . . . . . . . . | 1,700 loaves |
October. . . . . . . . . . . . . . . . | 1,540 loaves |
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