Rida, Inc., a manufacturer in a seasonal industry, is preparing its direct materials budget for the second quarter. It plans production of 240,000 units in the second quarter and 52,500 units in the third quarter. Raw material inventory is 43,200 pounds at the beginning of the second quarter. Other information follows. Prepare a direct materials budget for the second quarter. Direct materials Each unit requires 0.60 pounds of raw material, priced at $175 per pound. The company plans to end each quarter with an ending inventory of materials equal to 30% of next quarter’s budgeted materials requirements.
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.
Rida, Inc., a manufacturer in a seasonal industry, is preparing its direct materials budget for the second
quarter. It plans production of 240,000 units in the second quarter and 52,500 units in the third quarter.
Raw material inventory is 43,200 pounds at the beginning of the second quarter. Other information follows.
Prepare a direct materials budget for the second quarter. Direct materials Each unit requires 0.60 pounds of raw material, priced at $175 per pound. The company
plans to end each quarter with an ending inventory of materials equal to 30% of next
quarter’s budgeted materials requirements.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
