Question

DeWitt Industries has adopted the following production budget for the first 4 months of 2020. Month Units Month Units March 10,270 5,390 January 8,270 April February 4,290 Each unit requires 3 pounds of raw materials costing $3 per pound. On December 31, 2019, the ending raw materials inventory was 6,162 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 February March January $ $

Answer 1

February 8,270 March 5,390 DEWITT INDUSTRIES Direct Materials Purchase Budget January Units to be produced 10,270 Multiply by: Quantity of direct materials needed per unit Materials needed for production (lbs.) 30,810 Plus: Desired ending inventory of direct materials 4,962 Total materials requirements (lbs.) 35,772 Less: Beginning inventory of direct materials 6,162 Materials to be purchased (lbs.) 29,610 Multiply by: costs per pound 3.00 Total Budgeted direct material cost $ 88,830 April 4,290 3 pounds 12,870 (20% of next month's production needs) 24,810 3,234 28,044 4,962 23,082 3.00 69,246 16,170 2,574 18,744 3,234 15,510 3.00 46,530 $ $ $ $