Each unit requires 2 pounds of direct materials, which cost $5 per pound. The company's policy is to maintain direct materials inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 2,760 pounds of direct materials in inventory. Prepare the direct materials budget for July. MIAMI SOLAR Direct Materials Budget Units to produce Materials required per unit (pounds) Materials needed for production (pounds) Add: Desired ending materials inventory Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases $ July 4,600 2 9,200 2,760
Each unit requires 2 pounds of direct materials, which cost $5 per pound. The company's policy is to maintain direct materials inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 2,760 pounds of direct materials in inventory. Prepare the direct materials budget for July. MIAMI SOLAR Direct Materials Budget Units to produce Materials required per unit (pounds) Materials needed for production (pounds) Add: Desired ending materials inventory Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases $ July 4,600 2 9,200 2,760
Chapter7: Budgeting
Section: Chapter Questions
Problem 5EA: Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700...
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