Question

Magnolia, Inc. manufactures bedding sets. The budgeted production is for 31,600 comforters this year. Each comforter requires 7 yards of material. The estimated January 1 beginning inventory is 4,980 yards with the desired ending balance of 4,200 yards of material. If the material costs $3.10 per yard, determine the materials budget for the year.

Answer 1

$683,302

Explanation:

The computation of the materials budget for the year is shown below:-

Total Material required = Budgeted production units × Material Required per unit

= 31,600 × 7

= 221,200

Material to be purchased (Yards) = Total Material required + Desired Ending material inventory - Beginning Material inventory

= 221,200 + 4,200 - 4,980

= 220,420

Cost of Material to be purchased = Material to be purchased (Yards) × Price Per yard

= 220,420 × $3.10

= $683,302