Direct Materials Purchases Budget Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 19 ounces of plastic costing $0.16 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows: Units July 3,500 August 4,400 September 4,900 October 6,300 Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy. Required: Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. If required, round the total purchase cost to nearest whole value. Langer Company Direct Materials Purchases Budget
Direct Materials Purchases Budget Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 19 ounces of plastic costing $0.16 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows: Units July 3,500 August 4,400 September 4,900 October 6,300 Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy. Required: Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. If required, round the total purchase cost to nearest whole value. Langer Company Direct Materials Purchases Budget
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter8: Budgeting For Planning And Control
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Problem 17E: Crescent Company produces stuffed toy animals; one of these is Arabeau the Cow. Each Arabeau takes...
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Direct Materials Purchases Budget
Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 19 ounces of plastic costing $0.16 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows:
| Units | |
| July | 3,500 |
| August | 4,400 |
| September | 4,900 |
| October | 6,300 |
Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.
Required:
Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. If required, round the total purchase cost to nearest whole value.
| Langer Company | ||||
| Direct Materials Purchases Budget | ||||
| For July, August and September | ||||
| July | August | September | Total | |
| Units to be produced | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 | fill in the blank 4 |
| Direct materials per unit (ounces) | fill in the blank 5 | fill in the blank 6 | fill in the blank 7 | fill in the blank 8 |
| Production needs | fill in the blank 9 | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 |
| Desired ending inventory (ounces) | fill in the blank 13 | fill in the blank 14 | fill in the blank 15 | fill in the blank 16 |
| Total needs | fill in the blank 17 | fill in the blank 18 | fill in the blank 19 | fill in the blank 20 |
| Less: Beginning inventory | fill in the blank 21 | fill in the blank 22 | fill in the blank 23 | fill in the blank 24 |
| Direct materials to be purchased (ounces) | fill in the blank 25 | fill in the blank 26 | fill in the blank 27 | fill in the blank 28 |
| Cost per ounce | $0.16 | $0.16 | $0.16 | $0.16 |
| Total purchase cost | $fill in the blank 29 | $fill in the blank 30 | $fill in the blank 31 | $fill in the blank 32 |
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