Question

Magnolia, Inc., manufactures bedding sets. The budgeted production is for 55,000 comforters this year. Each comforter requires 7 yards of material. The estimated January 1 beginning inventory is 31,000 yards with the desired ending balance of 30,000 yards of material. If the material costs $4 per yard, determine the materials budget for the year.

Answer 1

Answer:

$1,536,000

Explanation:

Calculation of materials budget for 2012

Budgeted production units (A)  

55000

Material Required per unit (Yards) (B)

7

Total Material required (C) = A*B (Yards)

385000

Add: Desired Ending material inventory

30000

Less: Beginning Material inventory

-31000

Material to be purchased (Yards)

384000

Price Per yard

$4

Cost of Material to be purchased =

$1,536,000