Question

Magnolia, Inc. manufactures bedding sets. The budgeted production is for 11,500 comforters this year. Each comforter requires 7 yards of material. The estimated January 1 beginning inventory is 3,200 yards with the desired ending balance of 6,000 yards of material. If the material costs $5.40 per yard, determine the materials budget for the year. $

Answer 1

Solution:
	Magnolia Inc.
	Direct Materials Budget
		For the Year
	Units to be Produced	11500
	"X" By : Quantity of direct material per unit	7	Yards Per Unit
	No. of Yards of Material required for Production	80500	Yards
	Add: Ending Inventory	6000	Yards
	Total Quantity Needed	86500	Yards
	Less : Beginning Balance of inventory	3200	Yards
	Quantity to Purchase	83300	Yards
	Multiply by : Materials Cost Per unit of Yards	$                   5.40
	Total Cost of direct material purchases	$           4,49,820
Answer = Material Budget = $ 449,820