Yordi expects to produce 1,850 units in January and 2,110 units in February. The

Question

Yordi expects to produce 1,850 units in January and 2,110 units in February. The company budgets 2 pounds per unit of direct materials at a cost of $40 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 5,400 pounds. Yordi desires the ending balance in Raw Materials Inventory to be 80% of the next month's direct materials needed for production. Desired ending balance for February is 4,200 pounds. Prepare Yordi's direct materials budget for January and February. Yordi Company Direct Materials Budget Two Months Ended January 31 and February 28 January February Budgeted units to be produced Direct materials (pounds) per unit Direct materials needed for production Plus: Desired direct materials in ending inventory (pounds) Total direct materials needed Less: Direct materials in beginning inventory (pounds) Budgeted purchases of direct materials Direct materials cost per pound Budgeted cost of direct materials purchases 850 2110 2 4220 4200 8440 3700 5400 40 40 Hi

Explanation / Answer

RAW MATERIAL PURCHASE BUDGET Jan Feb Budgeted Production units 1,850 2,110 Raw material per unit 2 2 Direct material needed for production 3,700 4,220 Add: Desired Ending Inventory 3,376 4,200 Total needs 7,076 8,420 Less: Beginning Inventory 5,400 3,376 Purchase Units 1,676 5,044 Cost price per unit 40.00 40.00 Budgeted Purchase in $ 67,040 201,760

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.