FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Birdfeeders Unlimited makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores. | ||||||||||
$15 | Sales price per birdfeeder | |||||||||
1.5 | Board feet of wood required for each birdfeeder | |||||||||
$4 | Cost per board foot (actual) | |||||||||
10% | Desired ending wood inventory stated as a percentage of next month’s production requirements | |||||||||
20% | Desired ending finished goods inventory (finished birdfeeders) stated as a percentage of next month’s sales | |||||||||
$550,000 | Total cost of direct materials purchases in December | |||||||||
45% | of direct materials purchases are paid in the month of purchase | |||||||||
55% | of direct materials purchases are paid in the month after purchase |
Prepare the direct materials purchases budget for the first three months of the year, as well as a summary budget for the quarter. Assume the company needs 120,000 board feet of wood for production in April.
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