Question

Garver Industries has budgeted the following unit sales: 2020 January February March April May Units 10,000 8,000 9,000 11,000 15,000 The finished goods units on hand on December 31, 2019, was 2,000 units. Each unit requires 3 pounds of raw materials that are estimated to cost an average of $4 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 8,640 pounds of raw materials on hand at December 31, 2019. (a) Z. Your answer has been saved and sent for grading. See Gradebook for score details. For the first quarter of 2020, prepare a production budget. GARVER INDUSTRIES Production Budget For the Quarter Ended March 31, 2020 January February March Total Expected unit sales 10000 8000 9000 Desired ending finished goods units 1600 1800 2200 Total required units 11600 9800 11200 Less: Beginning finished goods units 2000 1600 1800 Required production units 9600 8200 9400 27200 Attempts: 1 of 1 used (b) For the first quarter of 2020, prepare a direct materials budget. GARVER INDUSTRIES Direct Materials Budget For the Quarter Ended March 31, 2020 January February March Total [no answer] [no answer] [no answer] [no answer] [no answer] [no answer]: [no answer] [no answer] [no answer] [no answer]
Please Do part B

Answer 1

Requirement b:

GARVER INDUSTRIES
Direct Materials Budget
For the Quarter Ended March 31,2020
	January	February	March	Total
Units to be produced	9,600	8,200	9,400	27,200
x Direct materials per unit	3	3	3	3
Total Pounds needed for production	28,800	24,600	28,200	81,600
Add: Desired ending inventory (30% of next months' pounds needed)	7380	8460	10,620	10,620
Total material required	36,180	33,060	38,820	92,220
Less: Beginning inventory	-8640	-7380	-8460	-8640
Raw material purchase requirement	27,540	25,680	30,360	83,580
x Cost per pound	$4	$4	$4	$4
Total cost of direct material purchase	$110,160	$102,720	$121,440	$334,320

Calculations:

*Desired ending inventory on March:

	April
Expected unit sales	11,000
Desired ending finished goods units (15,000 x 20%)	3,000
Total required units	14,000
Less: Beginning finished goods	-2,200
Required production	11,800
x direct materials per units	3
Total Pounds needed for production	35,400

Desired ending inventory = April month's total pounds needed for production x 30%

= 35,400 x 30%

=10,620