Crane Industries has adopted the following production budget for the first 4 months of 2027. Month January February Units Month Units 10,600 March 5,300 8,480 April 4,240 Each unit requires 2 pounds of raw materials costing $3 per pound. On December 31, 2026, the ending raw materials inventory was 4,240 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's production requirements. Prepare a direct materials purchases budget by month for the first quarter.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![Crane Industries has adopted the following production budget for the first 4 months of 2027.
Month
Units
January 10,600
Month
Units
March
5,300
February 8,480 April
4,240
Each unit requires 2 pounds of raw materials costing $3 per pound. On December 31, 2026, the ending raw materials inventory
was 4,240 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's
production requirements.
Prepare a direct materials purchases budget by month for the first quarter.
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CRANE INDUSTRIES
Direct Materials Purchases Budget
January
$
February
$
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8989f55-2f6a-47fa-b935-617abf039663%2F3d0476c2-b5f2-4b73-afb3-92544cd21899%2Fuv56b3g_processed.png&w=3840&q=75)
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