Culver Industries has adopted the following production budget for the first 4 mo

Question

Culver Industries has adopted the following production budget for the first 4 months of 2017 Month Units Month Units 10,280 March 8,430 April 5,170 4,420 January als r ventory at the endof the month ecua to 209 of Each unit requires 4 pounds o raw mate next month's production requirements. a s costing?4 per pound on December 31, 2016, the ending ra s mater als mentory was 9,400 pounds. Management wants to ave a ra mate Prepare a direct materials purchases budget by month for the first quarter. CULVERINDUSTRIE Direct Materials Purchases Budget January February March Question Attempts: of 5 used

Explanation / Answer

Direct material purchase budget :

January February March Production units 10280 8430 5170 Raw material per unit 4 4 4 Raw material needed for production 41120 33720 20680 Add: Desired ending inventory 6744 4136 3536 Total requirement 34376 37856 24216 Less: Beginning inventory -9400 -6744 -4136 Direct material purchase (qty) 24976 31112 20080 Cost per pound 4 4 4 Direct material purchase cost 99904 124448 80320

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