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Yandell expects to produce 2,000 units in January and 2,130 units in February. The company budgets five pounds per unit of direct materials at a
Yandell expects to produce 2,000 units in January and 2,130 units in February. The company budgets five pounds per unit of direct materials at a cost of $20 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 5,100 pounds. Yandell desires the ending balance in Raw Materials Inventory to be 80% of the next month's direct materials needed for production. Desired ending balance for February is 4,700 pounds. Prepare Yandell's direct materials budget for January and February .. Begin by preparing the direct materials budget for January and February through total direct materials needed line and then complete the budget by calculating the budgeted cost of direct materials purchases. Yandell Company Direct Materials Budget Two Months Ended January 31 and February 28 January Budgeted units to be produced 2,000 5 Direct materials (pounds) per unit Direct materials needed for production 10,000 Plus: Desired direct materials in ending inventory (pounds) Total direct materials needed February 2,130 5 10,650 0
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