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A sporting goods manufacturer budgets production of 52,000 pairs of ski boots in the first quarter...

A sporting goods manufacturer budgets production of 52,000 pairs of ski boots in the first quarter and 43,000 pairs in the second quarter of the upcoming year. Each pair of boots require 2 kg of a key raw material. The company aims to end each quarter with ending raw materials inventory equal to 20% of the following quarter’s material needs. Beginning inventory for this material is 20,800 kg and the cost per kg is $9. What is the budgeted materials need in kg. in the first quarter?

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Answer #1

Budgeted materials need in kg. in the first quarter = 84,920 Kgs

Working

Direct Materials Budget
First Quarter Second Quarter
Budgeted production (units) 52000 4300
Materials requirements per unit (in Kgs) 2 2
Materials needed for production (Kg) 104000 8600
Budgeted ending inventory (Kg) 1720
Total materials requirements (Kg) 105720
Beginning inventory (Kg) 20800
Materials to be purchased (Kg) 84920
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