Juda Industries manufactures a popular interactive stuffed animal for children t
ID: 2521507 • Letter: J
Question
Juda Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Juda Industries has a policy that states that the ending inventory of computer chips should be at least 30% ofthe following month's production needs. The production schedule for the first four months of the year is as folows (Click the icon to view the production schedule) Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget Juda Industries Direct Materials Budget For the Months of January through March JanuaryFebruary March Quarter Units to be produced Multiply by Quantity of direct materials needed per unit Quantity needed for production Plus: Desired ending inventory of direct materials Total quantity needed Data Table January February March Apri Stuffed animals to be produced 5,800 4,600 4,700 4,200 Print DoneExplanation / Answer
Less: Beginning inventory of direct materials
Quantity to purchase
Multiply by: Cost per unit
Total cost of direct material purchases
If any doubt please comment
Direct material Budget For the month of January to March Jan Feb Mar Qtr April Units to be produced U 5800 4600 4700 15100 4200 Multiply by Qty of Direct material needed per unit M 2 2 2 2 2 Qty needed for production U*M 11600 9200 9400 30200 8400 Plus: Desired Inventory of direct material (30%*nxt month qty needed) 2760 2820 2520 2520 (9200*30%) (9400*30%) (8400*30%) ans Total quantity needed 14360 12020 11920 32720Less: Beginning inventory of direct materials
3480 2760 2820 3480 (11600*30%)Quantity to purchase
10880 9260 9100 29240Multiply by: Cost per unit
$1 $1 $1 $1Total cost of direct material purchases
$10,880 $9,260 $9,100 $29,240Related Questions
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