Question

Question 5 4 pts Jordan Company makes and sells a single prod uct. It takes five pounds of direct materials to produce one unit of t his product. The budgeted units to be produced for the next four month s is given below: Budgeted Units to be Produ ced September October November December 31,900 units 22,400 units 26, 100 units 34,600 units Jordan Company wants to maintain monthly end ing inventories of direct materials that are equal to 24% of the follo wing month's production needs. The cost of direct materials is $2.75 per pound. Calculate the total cost of direct materials budgeted to be purchased in November

Answer 1

Ans.	Particulars	November
	Budgeted production (units)	26,100
	(X) Materials requirement per unit	5
	Materials needed for production	130500
	Add: budgeted ending inventory	41520
	Total materials requirements	172020
	Less: Budgeted beginning inventory	-31320
	Materials to be purchased	140700
	(X) Direct materials per unit	$2.75
	Total budgeted direct materials cost	$386,925
	*Working Notes:
	*Calculations of materials needed for production for the month of December:
	Particulars	December
	Budgeted production (units)	34600
	(X) Materials requirement per unit	5
	Materials needed for production	173000
	*Ending inventory for November = Materials needed of December *24%
	173,000 * 24%
	41520
	*Beginning inventory for November (Ending inventory of October) = Materials needed of November *24%
	130,500 * 24%
	31320