Question

Exercise 21-5

DeWitt Industries has adopted the following production budget for the first 4 months of 2017.

Month		Units		Month		Units
January		10,100		March		5,200
February		8,400		April		4,230

Each unit requires 5 pounds of raw materials costing $4 per pound. On December 31, 2016, the ending raw materials inventory was 9,260 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.

DEWITT INDUSTRIES Direct Materials Purchases Budget March 31, 2017For the Month Ending March 31, 2017For the Quarter Ending March 31, 2017
		January		February		March
Total Direct Labor CostTotal Cost of Direct Materials PurchasesBeginning Direct MaterialsTotal Pounds Needed for ProductionDesired Ending Direct MaterialsTotal Required Direct Labor HoursDirect Labor Time Per UnitCost Per PoundDirect Materials PurchasesDirect Labor Cost Per HourUnits to be ProducedTotal Materials RequiredDirect Materials Per Unit
Total Cost of Direct Materials PurchasesDesired Ending Direct MaterialsTotal Pounds Needed for ProductionTotal Direct Labor CostTotal Materials RequiredDirect Materials Per UnitTotal Required Direct Labor HoursDirect Labor Time Per UnitCost Per PoundUnits to be ProducedDirect Materials PurchasesBeginning Direct MaterialsDirect Labor Cost Per Hour
Total Pounds Needed for ProductionDesired Ending Direct MaterialsDirect Labor Time Per UnitDirect Labor Cost Per HourDirect Materials PurchasesTotal Direct Labor CostCost Per PoundTotal Cost of Direct Materials PurchasesDirect Materials Per UnitTotal Materials RequiredTotal Required Direct Labor HoursUnits to be ProducedBeginning Direct Materials
AddLess : Total Cost of Direct Materials PurchasesTotal Required Direct Labor HoursDirect Materials PurchasesTotal Materials RequiredTotal Pounds Needed for ProductionUnits to be ProducedDesired Ending Direct MaterialsDirect Labor Time Per UnitBeginning Direct MaterialsCost Per PoundDirect Labor Cost Per HourDirect Materials Per UnitTotal Direct Labor Cost
Total Pounds Needed for ProductionDirect Materials Per UnitDirect Labor Cost Per HourCost Per PoundDesired Ending Direct MaterialsDirect Labor Time Per UnitTotal Materials RequiredDirect Materials PurchasesUnits to be ProducedTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Required Direct Labor HoursBeginning Direct Materials
AddLess : Direct Materials PurchasesTotal Materials RequiredDirect Materials Per UnitTotal Direct Labor CostCost Per PoundTotal Required Direct Labor HoursUnits to be ProducedBeginning Direct MaterialsDesired Ending Direct MaterialsDirect Labor Cost Per HourTotal Pounds Needed for ProductionDirect Labor Time Per UnitTotal Cost of Direct Materials Purchases
Direct Labor Cost Per HourBeginning Direct MaterialsTotal Required Direct Labor HoursUnits to be ProducedDirect Labor Time Per UnitDirect Materials Per UnitTotal Materials RequiredTotal Cost of Direct Materials PurchasesTotal Direct Labor CostDirect Materials PurchasesCost Per PoundTotal Pounds Needed for ProductionDesired Ending Direct Materials
Direct Materials Per UnitUnits to be ProducedCost Per PoundDesired Ending Direct MaterialsTotal Required Direct Labor HoursTotal Materials RequiredTotal Cost of Direct Materials PurchasesDirect Labor Cost Per HourDirect Materials PurchasesTotal Direct Labor CostDirect Labor Time Per UnitBeginning Direct MaterialsTotal Pounds Needed for Production		$		$		$
Beginning Direct Materials    Total Direct Labor Cost    Cost Per Pound    Direct Materials Per Unit    Total Pounds Needed for Production    Direct Labor Time Per Unit    Direct Materials Purchases    Total Cost of Direct Materials Purchases    Total Required Direct Labor Hours    Total Materials Required    Units to be Produced    Desired Ending Direct Materials    Direct Labor Cost Per Hour		$		$		$

Answer 1

Solution

DEWITT INDUSTRIES
Direct materials Purchases Budget
For the Quarter ended March
	January	February	March
Required production of Units of finished goods	10100	8400	5200
Units of Raw material needed per unit of finished goods	5	5	5
Units of raw material needed to meet production	50500	42000	26000
Budgeted Ending Inventory (Pound)	8400	5200	4230*
Total Units of raw material needed	58900	47200	30230
Beginning Inventory (Pound)	9260	8400	5200
Units of raw material to be purchased	49640	38800	25030
Unit cost of raw material	$                4.00	$               4.00	$              4.00
Cost of raw material to be purchased	$   198,560.00	$ 155,200.00	$ 100,120.00

*4230 x 5 x 20%