Question

Perine Company has 2,376 pounds of raw materials in its December 31, 2016, ending inventory. Required production for January and February of 2017 are 4,570 and 6,030 units, respectively. 2 pounds of raw materials are needed for each unit, and the estimated cost per pound is $9. Management desires an ending inventory equal to 26% of next month’s materials requirements. Prepare the direct materials budget for January.

Perine Company has 2,376 pounds of raw materials in its December 31, 2016, ending inventory. Required production for January and February of 2017 are 4,570 and 6,030 units, respectively. 2 pounds of raw materials are needed for each unit, and the estimated cost per pound is $9. Management desires an ending inventory equal to 26% of next month's materials requirements. Prepare the direct materials budget for January. (Round intermediate calculations and final answer to 0 decimal places, eg. 5,275.) PERINE COMPANY Direct Materials Budget

Answer 1

		Direct materials Budget
	Units to be produced				4,570
	Direct materials per unit				2
	total pounds needed for production				9140
	Add:Desired ending direct materials				3136
	Total materials required				12276
	less:Desired beginning materials				2376
	direct materials purchase				9899
	cost per pound				9
	total cost of direct material purchases				89093