Question

Prepare the direct materials budget in total $ for January. Jan. units to produce = 8,300...

Prepare the direct materials budget in total $ for January.

Jan. units to produce = 8,300

Feb. units to produce = 9,375

2 pounds of direct material is needed per unit at $2 per pound

Ending Inventory of direct materials should be 10% of next month’s production needs.

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Answer #1

Direct Materials Budget

For the Months of January

Budgeted production (units)

8300

Materials requirements per unit (lbs.)

2

Materials needed for production (lbs.)

16600

Budgeted ending inventory (lbs.)

1875

Total materials requirements (lbs.)

18475

Budgeted beginning inventory (lbs.)

Materials to be purchased (lbs.)

18475

Direct material cost per lb.

$               2.00

Total budgeted direct materials

$    36,950.00

Ending Inventory of January=Material needs for feb x 10%

Ending Inventory of January=(9375 x 2) x 10%

Ending Inventory of January=1875 pounds

Beginning inventory of raw material is not available so it is assumed to be zero.

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