Tangshang Industries production budget from the 2 nd quarter of 2018, projected

ID: 2610132 • Letter: T

Question

Tangshang Industries production budget from the 2nd quarter of 2018, projected the following amounts of units to be produced:

April 1,000 units

May 1,200 units

June 1,250 units

Each unit requires 2 parts of component A and 3 parts of component B. Component A cost is $1.25 per unit and component B cost is $.80 per unit.

Calculate the Direct Material budgeted cost for May 2018

Calculate the Direct Material budgeted cost for the quarter April - June 2018

The raw materials inventory policy is 0 ending inventory, 0 beginning inventory. How much inventory of component A is required in April 2018?

a)Direct Material budgeted cost for May 2018 =( unit produced for may * component A*cost )+(unit produced for may * component A*cost ))

(1200 * 2 *1.25)+(1200*3*.80)

3000+ 2880

5880

b)Total unit produced = 1000+1200+1250=3450

Direct Material budgeted cost for the quarter April - June 2018 =[3450*2*1.25]+[3450*3*.80]

= 8625+ 8280

= $ 16905

c)inventory of component A is required in April 2018 =Unit produced in april *requirement

= 1000*2

= 2000 components

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