Question

3) Please prepare the Direct Materials budget for July-Septemberbased on the following information. Required production: July...

3) Please prepare the Direct Materials budget for July-Septemberbased on the following information.

Required production:

July 60,000

August 90,000

September 150,000

October 100,000

3 chips are needed per calculator

Desired ending inventory is 20% of the following month’s production needs

Each chip cost $2

Ending inventory for June is 36,000

Homework Answers

Answer #1

Direct Materials budget

July August September
Production in units 60,000 90,000 150,000
Direct materials per unit 3 3 3
Materials required for production 180,000 270,000 450,000
Ending raw materials 54,000 (270,000*20%) 90,000 (450,000*20%) 60,000 (100,000*3*20%)
Raw material needs 234,000 360,000 510,000
Beginning raw materials (36,000) (54,000) (90,000)
Raw material purchases 198,000 306,000 420,000
Raw materials cost per unit $2 $2 $2
Raw materials cost $396,000 $612,000 $840,000
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