Yandell exects to 1,900 units in January and 2,135 in February. The company Budg

Question

Yandell exects to 1,900 units in January and 2,135 in February. The company Budgets $70 per unti for direct material. 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 $46,000. Yandell 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 $51,200. Prepare Yandelle's direct materials budget for January and February.

Begin by preparing the direct materials budget for January and February through total direct materials needed line and then complete the budget by calculating the budgeted purchases of direct materials.

Yandell Company Direct Materials Budget Months Ended January 31 and February 28 January February Direct materials cost per unit Direct materials needed for production Plus: Total direct materials needed Less: Budgeted purchases of direct materials

Explanation / Answer

Yandell Company Direct Material Budget January and February Particulars January February Sales In Units             1,900.00        2,135.00 Direct Material Cost Per Unit                   70.00              70.00 Direct Material needed for production        133,000.00    149,450.00 Add: Closing Inventory for Materials        119,560.00      51,200.00 Total Material Needed        252,560.00    200,650.00 Less: Opening Material          46,000.00    119,560.00 Budgeted Material to be purchase        206,560.00      81,090.00

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