Question

Roger Industrial has estimated that production for the next five quarters will be:

Production Information
1st quarter, 2017		45,000 units
2nd quarter, 2017		40,000 units
3rd quarter, 2017		48,000 units
4th quarter, 2017		39,000 units
1st quarter, 2018		46,000 units

Finished units of production require 4 pounds of raw material per unit. The raw material cost is $3 per pound. There is $81,000 of raw material on hand at the beginning of the first quarter, 2017. Roger desires to have 15 percent of next quarter's material requirements on hand at the end of each quarter.

Prepare quarterly direct materials purchases budgets for Roger Industrial for 2017.

Roger Industrial Direct Materials Purchases Budget For the Year Ending December 31, 2017
		Quarter 1		Quarter 2		Quarter 3		Quarter 4		Year
Total material needed Beginning inventory of raw material Desired ending inventory of raw material Required raw material purchasesCost of raw material needed for production Units to be produced Cost of raw material per unit
Required raw material purchasesDesired ending inventory of raw materialBeginning inventory of raw materialCost of raw material needed for productionUnits to be producedCost of raw material per unitTotal material needed		$		$		$		$		$
Cost of raw material needed for productionUnits to be producedCost of raw material per unitRequired raw material purchasesTotal material neededDesired ending inventory of raw materialBeginning inventory of raw material
LessAdd : Beginning inventory of raw materialCost of raw material needed for productionDesired ending inventory of raw materialRequired raw material purchasesTotal material neededUnits to be producedCost of raw material per unit
Desired ending inventory of raw materialUnits to be producedBeginning inventory of raw materialCost of raw material per unitCost of raw material needed for productionTotal material neededRequired raw material purchases
LessAdd : Cost of raw material per unitBeginning inventory of raw materialCost of raw material needed for productionUnits to be producedDesired ending inventory of raw materialTotal material neededRequired raw material purchases
Units to be producedDesired ending inventory of raw materialBeginning inventory of raw materialTotal material neededRequired raw material purchasesCost of raw material per unitCost of raw material needed for production		$		$		$		$		$

Answer 1

Solution:

Roger Industrial Direct materials Purchase Budget For the year ending December 31, 2017
Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Budgeted Production units	45000	40000	48000	39000	172000
Raw material per unit (In Pounds)	4	4	4	4	4
Total requirement of raw materials	180000	160000	192000	156000	688000
Add: Desired ending inventory (15% of next quarter production needs)	24000	28800	23400	27600	27600
Total needs	204000	188800	215400	183600	715600
Less: Beginning inventory	27000	24000	28800	23400	27000
Budgeted purchase units of raw material (In Pounds)	177000	164800	186600	160200	688600
Raw material cost per pound	$3.00	$3.00	$3.00	$3.00	$3.00
Budgeted cost of purchases	$531,000.00	$494,400.00	$559,800.00	$480,600.00	$2,065,800.00