Each unit requires 3 pounds of direct materials, which cost $6 per pound. The company's policy is to maintain direct materials inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 4,950 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July. MIAMI SOLAR Direct Materials Budget For Month Ended July 31 Budget production (units) 5,500 Materials needed for production (lbs.) Total materials requirements (Ibs.) Materials to be purchased (lbs.) Budgeted cost of direct materials purchases
Each unit requires 3 pounds of direct materials, which cost $6 per pound. The company's policy is to maintain direct materials inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 4,950 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July. MIAMI SOLAR Direct Materials Budget For Month Ended July 31 Budget production (units) 5,500 Materials needed for production (lbs.) Total materials requirements (Ibs.) Materials to be purchased (lbs.) Budgeted cost of direct materials purchases
Chapter1: Financial Statements And Business Decisions
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Miami Solar manufactures solar panels for industrial use. The company budgets production of 5,500 units (solar panels) in July and 4,800 units in August.
Each unit requires 3 pounds of direct materials, which cost $6 per pound. The company’s policy is to maintain direct materials inventory equal to 30% of the next month’s direct materials requirement. As of June 30, the company has 4,950 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July.
Transcribed Image Text:Each unit requires 3 pounds of direct materials, which cost $6 per pound. The company's policy is to maintain direct materials
inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 4,950 pounds of direct
materials in inventory, which complies with the policy. Prepare a direct materials budget for July.
MIAMI SOLAR
Direct Materials Budget
For Month Ended July 31
Budget production (units)
5,500
Materials needed for production (Ibs.)
Total materials requirements (Ibs.)
Materials to be purchased (Ibs.)
Budgeted cost of direct materials purchases
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