Management > QUESTIONS & ANSWERS > University of California, Davis-MANAGEMENT 11B-Homework 4-REVIEWED BY EXPERTS-ALL ANSWERS CORRECT!!! (All)

University of California, Davis-MANAGEMENT 11B-Homework 4-REVIEWED BY EXPERTS-ALL ANSWERS CORRECT!!!

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Management 11B Problem Set #4 Answer Key Total Points: 120 Chapter 20 1) Exercise 20-5 (9 points) E20- 5 Prepare a direct materials purchases budget. (SO 3), AP Dallas Industries has adopted ... the following production budget for the first 4 months of 2013. Month Units Mont h Unit s Januar y 10,0 00 Marc h 5,00 0 Februa ry 8,00 0 April 4,00 0 Each unit requires 3 pounds of raw materials costing $2 per pound. On December 31, 2012, the ending raw materials inventory was 9,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 30% of next month's production requirements. Instructions Prepare a direct materials purchases budget by month for the first quarter. Answer: DALLAS INDUSTRIES Direct Materials Purchases Budget For the Quarter Ending March 31, 2013 January February March Units to be produced Direct materials per unit Total pounds needed for production Add: Desired ending direct materials (pounds)* Total materials required Less: Beginning direct materials (pounds) Direct materials purchases Cost per pound Total cost of direct materials purchases 10,000 X 3 30,000 7,200 37,200 9,000 28,200 X $2 $56,400 8,000 X 3 24,000 4,500 28,500 7,200 21,300 X $2 $42,600 5,000 X 3 15,000 3,600 18,600 4,500 14,100 X $2 $28,200 *30% of next month’s production needs. [Show More]

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