Question

# Your company had the following projected unit sales for 2021: 2021 quarter 1: 59,600units 2021 quarter...

2021 quarter 1: 59,600units

2021 quarter 2: 21,300 units

2021 quarter 3: 48,300 units

2021 quarter 4: 54,500 units

2022 quarter 1: 43,400 units

-each unit produced needs 5 pounds of direct materials. The company had 29000 pounds of direct materials in its ending inventory on decmeber 31, 2019. The company prefers to keep 15000 pounds of direct materals in ending inventory.

-the company had 6500 units in its ending inventory of december 31, 2019. the company prefers to keep 15% of the upcoming quarters projected sales volume in its ending inventory for curret quarter

-each pound of direct materials costs \$3,000

-selling price per unit is \$36

Prepare a production budget for quarter 1 of 2021 (result should be I units)

AND prepare a direct materials purchase budget for quarter 1 of 2021 (result should be in \$)

 Production Budget Quarter 1 Beginning sales 59,600 Add: Ending finished goods inventory 3,195 (21,300*15%) Less: Beginning finished goods inventory 8,850 (59,600*15%) Budgeted production 53,945
 Direct Material Purchases Budget Quarter 1 Budgeted production 53,945 Direct material required per unit (in pounds) 5 Total direct material needed for production 269,725 Add: Desired ending inventory 15,000 Total material units required 284,725 Less: Beginning inventory 15,000 Direct material purchases 269,725 Cost per pound \$3,000 Cost of direct material purchases \$809,175,000

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