Dean Manufacturing expects to produce 12,900 units in January and 14,200 units in February. The company budgets $10 per yard for direct materials and each unit has been budgeted 1 yard of material. The amount of indirect materials needed for production has been determined to be insignificant and will therefore not be considered in the calculation. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 3,500 yards. The company desires the ending balance in Raw Materials Inventory to be 16% of the next month's direct materials needed for production. What is the cost of the budgeted purchases of direct materials needed for January? Question content area bottom Part 1 A. $151,720 B. $22,720 C. $129,000 D.$ 116, 720
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.
Dean Manufacturing expects to produce 12,900 units in January and 14,200 units in February. The company budgets $10 per yard for direct materials and each unit has been budgeted 1 yard of material. The amount of indirect materials needed for production has been determined to be insignificant and will therefore not be considered in the calculation. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 3,500 yards. The company desires the ending balance in Raw Materials Inventory to be 16% of the next month's direct materials needed for production. What is the cost of the budgeted purchases of direct materials needed for January?
Question content area bottom
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