Question Help * Yoder expects to produce 1,500 units in January and 2,110 units

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Question Help * Yoder expects to produce 1,500 units in January and 2,110 units in February. The company budgets 4 pounds per unit of direct materials at a cost of $5 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. Yoder desires the ending balance in Raw Mater als Inventory to be 40% of the next m one s direct mate as needed for production. Desired ending balance for February is 4,500 pounds. Prepare Yoders direct materials budget for January and February. Begin by preparing the direct materials budget for January and February through total drect materials needed ine and then compliete the budget by caiculating the budgeted cost of direct materials purchases Yoder Company Direct Materials Budget Two Months Ended January 31 and February 28 January February Direct materials (pounds) per unit Direct materials needed for production Plus: Total direct materials needed Less Budgeted purchases of druct materials Direct materials …t per pound Budgeted cost of direct materials purchases

Explanation / Answer

January February Expected production 1500 2110 Direct materials per unit 4 4 Direct materials needed for production 6000 8440 Plus: Desired ending inventory 3376 4500 Total direct materials needed 9376 12940 Less: Beginning inventory 5400 3376 Budgeted purchases of direct materials 3976 9564 Direct materials cost per pound 5 5 Budgeted cost of direct material purchases 19880 47820

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