Dewitt Industries has adopted the following production budget for the first 4 months of 2012.?

Question

Dewitt Industries has established the following production budget for the first four months of 2012:

January: 10,320 units
February: 8,370 units
March: 5,320 units
April: 4,220 units

Each unit requires 4 pounds of raw materials, with the cost of raw materials at $2 per pound. As of December 31, 2011, the ending raw materials inventory was 9,490 pounds. Management aims to maintain a raw materials inventory at the end of each month equal to 20% of the next month's production requirements.
Please complete a direct materials purchases budget by month for the first quarter.

Anonymous · Accepted Answer

January 
Units to be produced 10,320
x Direct materials per unit 4
Total pounds needed for production 41,280
+ desired ending direct materials 6,696 (33,480 x 20%)
Total materials required 47,976
- Beginning Direct materials 9,490
Direct material purchases 38,486
Cost per pounds $2
Total cost of direct material purchases $76,972
February:
Units to be produced 8,370
x Direct materials per unit 4
Total pounds needed for production 33,480
+ desired ending direct materials 4,256 (21,280 x 20%)
Total materials required 37,736
- Beginning Direct materials 6,696
Direct material purchases 31,040
Cost per pounds $2
Total cost of direct material purchases $62,080
March:
Units to be produced 5,320
x Direct materials per unit 4
Total pounds needed for production 21,280
+ desired ending direct materials 3,376 (4,220 x 4 x20%)
Total materials required 24,656
- Beginning Direct materials 4,256
Direct material purchases 20,400
Cost per pounds $2
Total cost of direct material purchases $40,800

Anonymous

Dewitt Industries has adopted the following production budget for the first 4 months of 2012.?

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