ida Incorporated is preparing its direct materials budget for the second quarter. It budgets production of 281,000 units in the econd quarter and 67,500 units in the third quarter. Each unit requires 0.40 pound of direct material, priced at $190 per pound tarting with the second quarter, the company plans to end each quarter with an ending inventory of materials equal to 50% of ext quarter's budgeted direct materials required. Raw material inventory is 56,200 pounds at the beginning of the second uarter. repare a direct materials budget for the second quarter. lote: Enter "per unit" answers in two decimal places.
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.
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![Exercise 7-7 (Algo) Manufacturing: Direct materials budget LO P1
Rida Incorporated is preparing its direct materials budget for the second quarter. It budgets production of 281,000 units in the
second quarter and 67,500 units in the third quarter. Each unit requires 0.40 pound of direct material, priced at $190 per pound.
Starting with the second quarter, the company plans to end each quarter with an ending inventory of materials equal to 50% of
next quarter's budgeted direct materials required. Raw material inventory is 56,200 pounds at the beginning of the second
quarter.
Prepare a direct materials budget for the second quarter.
Note: Enter "per unit" answers in two decimal places.
RIDA INCORPORATED
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
281,000 units](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe15b8af0-27e1-4c12-b293-7f8d2f41b828%2Fdaf956b1-e847-4a61-8832-fad5c6a3515e%2F2wgldx_processed.png&w=3840&q=75)
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