Question

Perine Company has 3,440 pounds of raw materials in its December 31, 2019, ending inventory. Required production for January and February of 2020 are 4,300 and 5,800 units, respectively. 4 pounds of raw materials are needed for each unit, and the estimated cost per pound is $7. Management desires an ending inventory equal to 20% of next month's materials requirements. Prepare the direct materials budget for January. PERINE COMPANY Direct Materials Budget Question Attempts: o of 3 used

Answer 1

Direct material budget

For the month ended january

Unit to be produced	4300
Direct material per unit	4
Total pounds required for production	17200
Add: Desired ending inventory (5800*4*20%)	4640
Total material required	21840
Less; Beginning material inventory	-3440
Direct material purchases	18400
Cost per pound	7
Total cost of direct material purchases	128800