Exercise 23-5 Your answer is partially correct. Try again. DeWitt Industries has
ID: 2512414 • Letter: E
Question
Exercise 23-5 Your answer is partially correct. Try again. DeWitt Industries has adopted the following production budget for the first 4 months of 2017. Month January February U nits 10,170 8,470 Month March April Units 5,190 4,310 Each unit requires 5 pounds of raw materials costing $3 per pound. On December 31, 2016, the ending raw materials inventory was 9,100 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.Explanation / Answer
DEWITT INDUSTRIES
DIRECT MATERIAL PURCHASES
FOR THE QUARTER ENDING MARCH 31,2017
January
February
March
Units to be produced
10170
8470
5190
Direct materials per unit
x 5
x 5
x 5
Total pounds needed for production
50850
42350
25950
Add: Desired ending direct materials (pounds)*
8470
5190
4310
Total materials required
59320
47540
30260
Less: Beginning direct materials (pounds)
9100
8470
5190
Direct materials purchase
50220
39070
25070
Cost per pound
x 3
x 3
X 3
Total cost of direct materials purchases
150660
117210
75210
*20% of next month’s production needs.
January
February
March
Units to be produced
10170
8470
5190
Direct materials per unit
x 5
x 5
x 5
Total pounds needed for production
50850
42350
25950
Add: Desired ending direct materials (pounds)*
8470
5190
4310
Total materials required
59320
47540
30260
Less: Beginning direct materials (pounds)
9100
8470
5190
Direct materials purchase
50220
39070
25070
Cost per pound
x 3
x 3
X 3
Total cost of direct materials purchases
150660
117210
75210
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