Question

Legalos Company makes and sells a single product. It takes seven pounds of
direct materials to produce one unit of this product. Budgeted production
for the next three months is given below:

                  Budgeted Units to be Produced            
February                  18,500 units
March                     19,200 units
April                     14,300 units

The company wants to maintain monthly ending inventories of direct materials
that are equal to 54% of the following month's production needs. The cost of
direct materials is $1.50 per pound.

Calculate the total cost of direct materials budgeted to be purchased in
February.

Answer 1

Legalos Company Direct Materials purchases Budget For the month February 2020 February 18500 Units to be produced Direct materials per unit Total pounds needed for production Add: Desired ending direct materials (Pounds) Total material required Less: Beginning direct materials (Pounds) Direct materials purchases Cost per pound Total cost of direct materials Purchases 129500 72576 202076 69930 132146 1.50 198219