Exercise 9-5 Month Units Month Units Each unit requires 3 pounds of raw material
ID: 2487062 • Letter: E
Question
Exercise 9-5
Month
Units
Month
Units
Each unit requires 3 pounds of raw materials costing $3 per pound. On December 31, 2013, the ending raw materials inventory was 9,320 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month’s production requirements.
Prepare a direct materials purchases budget by month for the first quarter.
PLEASE CORRECT AREAS IN RED!
Exercise 9-5
Dallas Industries has adopted the following production budget for the first 4 months of 2014.Month
Units
Month
Units
January 10,310 March 5,370 February 8,370 April 4,490
Each unit requires 3 pounds of raw materials costing $3 per pound. On December 31, 2013, the ending raw materials inventory was 9,320 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month’s production requirements.
Prepare a direct materials purchases budget by month for the first quarter.
PLEASE CORRECT AREAS IN RED!
Explanation / Answer
Begining direct materials given 9,320 pounds
Direct material purchases 26,632
Cost per pound $3
Total cost of Direct material purchases=$79,896.
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