Yem

expects to produce

1,850

units in

January

and

2,110

units in

February.

The company budgets

two

pounds per unit of direct materials at a cost of

$35

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

5,000

pounds.

Yem

desires the ending balance in Raw Materials Inventory to be

60%

of the next month's direct materials needed for production. Desired ending balance for

February

is

4,500

pounds. Prepare

Yem'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.

Yem Company
Direct Materials Budget
Two Months Ended January 31 and February 28
		January	February
Direct materials (pounds) per unit
Direct materials needed for production
Plus:
Total direct materials needed