check my work Required information Miami Solar manufactures solar panels for ind

Question

check my work Required information Miami Solar manufactures solar panels for industrial use. The company budgets production of 5,900 units (solar panels) in July and 5,500 units in August. Each unit requires 3 pounds of direct materials, which cost $7 per pound. The company's policy is to maintain direct materials inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 5,310 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July. MIAMI SOLAR Direct Materials Budget For Month Ended July 31 Budget production (units) 5,900 aterials requirements per unit Materials needed for production (Ibs.) Add: Budgeted ending inventory (bs.) Total materials requirements (Ibs.) 17,700 5,310 ess: Beginning inventory (Ibs.) Materials to be purchased (Ibs.) aterials price per pound Budgeted cost of direct materials purchases

Explanation / Answer

Direct material budget :

Budgeted production (unit) 5900 material requirement per unit 3 Material needed for production 17700 Add: Desired ending inventory 4950 Total material needs 22650 Less: Beginning inventory -5310 Material to be purchased 17340 Material price per pound 7 Budgeted cost of material purchase 121380

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