The Bakery produces organic bread that is sold by the loaf. Each loaf requires 1
ID: 2551278 • Letter: T
Question
The Bakery produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays $2.50 per pound of the organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months:
The bakery has a policy that it will have 20% of the following month's flour needs on hand at the end of each month. At the end of June, there were 150 pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.
Begin the direct materials by determining the total quantity needed, then complete the budget.
Data Table July 1,500 loaves August 1,880 loaves September 1,680 loaves October 1,560 loavesExplanation / Answer
Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.
July August September Quarter Units to be produced 1500 1880 1680 5060 Multiply by Pounds of flour needed per unit 0.50 0.50 0.50 0.50 Quantity needed (Ibs) for production 750 940 840 2530 Plus: Desired ending inventory of direct materials 188 168 156 156 Total quantity (lbs) needed 938 1108 996 2686 Less: Beginning material (150) (188) (168) (150) Material purchase 788 920 828 2536 Price per pound 2.50 2.50 2.50 2.50 Material purchase cost 1970 2300 2070 6340Related Questions
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