Exercise 10-7 Direct Materials Purchases Budget Roehler Industrial has estimated that production for the next five quarters will be: Quarter 1, 2020 Quarter 2, 2020 Quarter 3, 2020 Quarter 4, 2020 Quarter 1, 2021 45,000 units 41,000 units 49,000 units 38,000 units 47,000 units Material purchase and requirements for production follow: Pounds of raw material required per unit 6 Raw material cost per pound 7.00 Raw material on hand, beginning of first quarter, 2020 $ 283,500 Roehler desires to have materials on hand at the end of each quarter based on the following: Percentage of next quarter's material requirements 15% Required Prepare quarterly direct materials purchases budgets for Roehler Industries for 2020. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Units to be produced Cost of raw material per unit Cost of raw material needed for production Add desired ending inventory of raw material Total material needed Less beginning inventory of raw material Required raw material purchases
