Question

eWitt Industries has adopted the following production budget for the first 4 months of 2020. Month...

eWitt Industries has adopted the following production budget for the first 4 months of 2020.

Month

Units

Month

Units
January 10,130 March 5,250
February 8,110 April 4,260


Each unit requires 5 pounds of raw materials costing $4 per pound. On December 31, 2019, the ending raw materials inventory was 10,130 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month’s production requirements.

Prepare a direct materials purchases budget by month for the first quarter.

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