Question

Yasmin expects to produce 2 comma 000 units in January and 2 comma 180 units in February. The company budgets 5 pounds per unit of direct materials at a cost of $ 50 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account​ (all direct​ materials) on January 1 is 5 comma 400 pounds. Yasmin desires the ending balance in Raw Materials Inventory to be 40​% of the next​ month's direct materials needed for production. Desired ending balance for February is 4 comma 800 pounds. Prepare Yasmin​'s direct materials budget for January and February.

Answer 1

Yasmin Inc.

Direct Materials Budget

For the Months of January and February, Year 202x

January February

Units to be produced 2,000 2,800

Direct materials per unit 5 5

Direct materials need for prod. 10,000 14,000

Desired ending inventory 5,600 4,800

Beginning inventory (5,400) (5,600)

Direct material purchases 10,200 13,200

Cost per pound $50 $50

Cost of direct materials $510,000 $660,000

Step-by-step explanation:

month expected production

January 2,000

February 2,800

5 pounds per unit at $50 per pound

beginning raw materials inventory 5,400 pounds

desired ending raw materials inventory 4,800 pounds