Question

Required information Use the following information for the Quick Study below. Miami Solar manufactures solar panels for industrial use. The company budgets production of 4,400 units (solar panels) in July and 5.900 units in August QS 7-13 Manufacturing: Direct materials budget LO P1 Each unit requires 2 pounds of direct materials, which cost $6 per pound. The company's policy is to maintain direct materials Inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 2.640 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July. MIAMI SOLAR Direct Materials Budget For Month Ended July 31 Budget production (units) Materials requirements per unit Materials needed for production (lbs.) Add: Budgeted ending inventory (lbs.) Total materials requirements (lbs) Less Beginning inventory (lbs) Materials to be purchased (lbs.) Materials price per pound Budgeted cost of direct materials purchases

Answer 1

	Direct Materials Budget
	Budgeted production (units)				4,400
	Material requirements per unit				2
	materials needed for production (lbs)				8800
	Add:Budgeted ending inventory(lbs)				3540
	Total materials requirements (lbs)				12340
	less:Beginning inventory (lbs)				2640
	Materials to be purchased (lbs)				9700
	Materials price per pound				6
	Budgeted cost of direct material purchases				58200