Exercise 21-5 Dallas Industries has adopted the following production budget for

Question

Exercise 21-5 Dallas Industries has adopted the following production budget for the first 4 months of 2014. Month Units Month Units January February 10,160 March 8,420 April 5,460 4,460 Each unit requires 3 pounds of raw materials costing $4 per pound. On December 31, 2013, the ending raw materials inventory was 9,170 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's production requirements Prepare a direct materials purchases budget by month for the first quarter.

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Direct Material Purchase Budget Paticulars Jan Feb March April Production in units              10,160.00                8,420.00                    5,460.00                4,460.00 Pounds reqd per unit                         3.00                        3.00                            3.00                         3.00 Pounds reqd for production              30,480.00              25,260.00                 16,380.00              13,380.00 Ending Raw Materials                5,052.00                3,276.00                    2,676.00 Beginning Raw Materials                9,170.00                5,052.00                    3,276.00                2,676.00 Purchases in pounds = Prod +Ending - Beginning              26,362.00              23,484.00                 15,780.00 Cost per pound                         4.00                        4.00                            4.00 Purchase cost            105,448.00              93,936.00                 63,120.00

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