Question

The Bakery at the Lake produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays $2.00 per pound of the organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months: E: (Click the icon to view the units to be produced.) The bakery has a policy that it will have 20% of the following month's flour needs on hand at the end of each month. At the end of June, there were 158 pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter. Begin the direct materials budget by determining the total quantity needed, then complete the budget. (Enter the pounds per unit as a decimal to two places. Round your calculations to the nearest whole number.) i Data Table The Bakery at the Lake Direct Materials Budget For the Months of July through September July August September Quarter Units to be produced Multiply by: Pounds of flour needed per unit Quantity needed (lbs) for production July ................. August September .......... October .............. 1,580 loaves 1,860 loaves 1,620 loaves 1,580 loaves Plus: Desired ending inventory of direct materials Total quantity (lbs) needed Print Done Enter any number in the edit fields and then click Check Answer.

Answer 1

The Bakery at the Lake Direct Material Budgets for the Months of July to Septemeber July August September Quarter Units To be Produced 1580 1860 1620 5060 Multiply by: Pounds of Flour needed per unit 0.5 0.5 0.5 Quantity needed (lbs) for Production 790 930 8101 2530 Plus: Desired Ending inventory of Direct Material 186 158 158 Total Quantity Needed 976 1092 968 2688 0.5 162 186 Desired Ending Inventory =20% of next month Quantity Needed July = (930*20%) August =(810*20%) 162 Septmenber= ( 1580*0.5)*20% 158