Question

London Industries Limited has the following information: 2017 July August Budgeted Sales Units Budgeted Production Units 19,200 16,400 18,800 23,600 25,600 20,000 16,000 18,000 22,000 30,000 October Each unit requires 6 pounds of raw materials that are estimated to cost an average of $10 per pound. They also have a policy of maintaining a raw materials inventory at the end each month equal to 20% of the pounds needed for the following month's production. There were 16,000 pounds of raw materials on hand at June 30 2017. Instructions For the third gwarter of 2017, prepare a direct materials budget uly Total Budgeted units to be produced Direct materials nceded per unit Materials required for production Add: Desired ending direct materials -Total materials required Less: Beginning direct materials Direct materials purchases Cost per pound 16,400 18,800 23,600 25,600 16,000 18,000 22,000 30,000 August September October November Each unit requires 6 pounds of raw materials that are estimated to cost an average of S10 per pound. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 20% of the pounds needed for the following month's production. There were 16,000 pounds of raw materials on hand at June 30, 2017 For the thind quarter of 2017, prepare a direct materials budget. Total September July August Direst materials needed per un Materials regaired for peoduction Add: Desired ending direct materials Total malerials reqaired Less Beginning direct materials Direct materials parchases Cost par pound Total cost of dieect matcrials parchases

Answer 1

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