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

Answer:

                                 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

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