Asked by Olivia DiPaolo on Jul 06, 2024
Verified
The following facts are known:
∙\bullet∙ The total pounds needed for production are 2 times the units to be produced.
∙\bullet∙ The desired ending direct materials inventory is 20% of the total pounds needed for production.
∙\bullet∙ The beginning direct materials inventory is equal in number to 10% of the units to be produced.
∙\bullet∙ Cost per pound is $5.
∙\bullet∙ Total cost of the direct materials purchases is $1035000.
Instructions
Prepare a direct materials budget for the period.
Direct Materials Inventory
Raw materials that are directly traceable to the manufacturing of products and are considered part of the inventory assets on the balance sheet.
Direct Materials Budget
A financial plan that estimates the raw materials needed for production and their expected costs.
Cost per Pound
A measurement of the cost to produce, acquire, or create one pound of a product or material.
- Comprehend and utilize principles in the formulation of diverse budgets, such as the direct materials budget, merchandise purchases budget, and operating budgets.
- Compute the necessary acquisitions and disbursements for direct materials, goods, and various budget elements based on provided information.
Verified Answer
Learning Objectives
- Comprehend and utilize principles in the formulation of diverse budgets, such as the direct materials budget, merchandise purchases budget, and operating budgets.
- Compute the necessary acquisitions and disbursements for direct materials, goods, and various budget elements based on provided information.
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