Final answer:
To determine the materials budget for the year, calculate the total quantity of material required and the total material purchases. Multiply the total material purchases by the cost per yard to determine the materials budget for the year. The materials budget for the year is $913,825.
Step-by-step explanation:
To determine the materials budget for the year, we need to calculate the total quantity of material required. Each comforter requires 7 yards of material, and the budgeted production is for 23,700 comforters. So, the total quantity of material required is 7 yards/comforter * 23,700 comforters = 165,900 yards.
Given that the estimated January 1 beginning inventory is 3,850 yards and the desired ending balance is 4,100 yards, we can calculate the total material purchases for the year. The formula is:
Total material purchases = Total quantity of material required + Desired ending balance - Estimated January 1 beginning inventory
Total material purchases = 165,900 yards + 4,100 yards - 3,850 yards
Total material purchases = 166,150 yards
Finally, we can calculate the materials budget for the year by multiplying the total material purchases by the cost per yard, which is $5.50. The formula is:
Materials budget = Total material purchases * Cost per yard
Materials budget = 166,150 yards * $5.50/yard = $913,825
Therefore, the materials budget for the year is $913,825.