mathxl.com Do rk - jennifer sanchez ACG 2071 Fall 2017 Homework: Ch. 11. Master

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mathxl.com Do rk - jennifer sanchez ACG 2071 Fall 2017 Homework: Ch. 11. Master Budget Score: 0 of 1 pt E9-20A (similar to) each computer chip. To help to guard against stockouts of the computer chip, Donaldson Industries has a policy that states that the ending inventory of computer Save 3 of 8 (5 complete) Hw Score: 37.32%, 2.99 of 8 pu Question Help Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $4 for chips should be at least 20% of the following month's production needs. The production schedule for the first four months of the year is as follows: 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. Donaldson Industries Direct Materials Budget For the Months of January through March January February March Quarter Units to be produced Multply by: Quantity of direct materials needed per unit Quantity needed for production Enter any number in the edit fields and then click Check Answer. part remaining

Explanation / Answer

Solution:

Preparing the Direct Materials Budget by First Calculating the Total Quantity Needed, then Computing the Budget:

Donaldson Industries

Direct Material Budget for computer chips

For the Months of January through March

Donaldson Industries

Direct Material Budget for computer chips

For the Months of January through March

January February March Quarter Units to be Produced 5,300 4,400 4,700 14,400 Quantity of direct material needed per unit 3 3 3 3 Quantity needed for production 15,900 13,200 14,100 43,200 Plus: desired end month inventory (20% of the following months of production needs) 2,640 2,820 2,460 2,460 Total quantity needed 18,540 16,020 16,560 45,660 Less: Beginning invetory of of DM (3,180) (2,640) (2,820) (3,180) Quantity of chips to purchase 15,360 13,380 13,740 42,480 Cost Per Item $4 $4 $4 $4 Total cost for direct materials purchased $61,440 $53,520 $54,960 $169,920

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