Question 7 4 pts Dodd Company makes and sells a·single-Product. Each finished un

Question

Question 7 4 pts Dodd Company makes and sells a·single-Product. Each finished unit r four pounds of direct materials. The budgeted units to be produced for the third quarter of the current year are given below: July August September Budgeted Units to be Produced 26,000 units 21,000 units 33,000 units The company wants to maintain monthly ending inventories of direct materials equal to 35% of the next month's production needs. The cost of the direct materials is $1.75 per pound. Assume Dodd Company pays for 60% of a month's purchases of direct materials in the month of purchase and the other 40% is paid in the following month. Calculate the total cash budgeted to be paid in August for direct material purchases. Do not use decimals in your answer

Explanation / Answer

July August Budgeted production 26000 21000 Pounds per unit 4 4 Total materials for production 104000 84000 Add: Ending inventory 29400 46200 Total materials needed 133400 130200 Less: Beginning inventory 36400 29400 Budgeted materials to be purchased 97000 100800 Cost per pound 1.75 1.75 Cost of material purchases 169750 176400 Cash to be paid in August for direct materials =(169750*40%)+(176400*60%)= 173740

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