Electro Company budgets production of 670,000 electric panels in the second quarter and 740,000 electric panels in the third quarter. Each panel requires 0.80 pound of direct material at a cost of $2.00 per pound. The company desires to end each quarter with an ending inventory of this material equal to 20% of next quarter's budgeted materials requirements. Beginning inventory of this material is 107,200 pounds. Prepare a direct materials budget for the second quarter. ELECTRO COMPANY Direct Materials Budget Units to produce Materials required per unit Materials needed for production (pounds) Add: Desired ending materials inventory Total materials required Less: Beginning materials inventory Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases . Second Quarter. 670,000 units 0.80 pounds 536,000 pounds

Electro Company budgets production of 670,000 electric panels in the second quarter and 740,000 electric panels in the third quarter. Each panel requires 0.80 pound of direct material at a cost of $2.00 per pound. The company desires to end each quarter with an ending inventory of this material equal to 20% of next quarter's budgeted materials requirements. Beginning inventory of this material is 107,200 pounds. Prepare a direct materials budget for the second quarter. ELECTRO COMPANY Direct Materials Budget Units to produce Materials required per unit Materials needed for production (pounds) Add: Desired ending materials inventory Total materials required Less: Beginning materials inventory Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases . Second Quarter. 670,000 units 0.80 pounds 536,000 pounds

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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