Sheffield Company has 2,080 pounds of raw materials in its December 31, 2021, ending inventory. Required production for January and February of 2022 are 5,200 and 6,500 units, respectively. Two pounds of raw materials are needed for each unit; and the estimated cost per pound is $5. Management desires an ending inventory equal to 20% of next month’s materials requirements.Prepare the direct materials budget for January.---**Graph/Diagram Explanation:**There is a section titled **"SHEFFIELD COMPANY Direct Materials Budget"** with a dropdown for selecting the date range, which is set to "For the Month Ending January 31, 2022."Below this title, there are several blank fields organized in a tabular format that appear to be used for inputting budgetary figures. These fields are intended for entering data for the preparation of the direct materials budget, but no specific numbers or detailed labels are shown in the image. The layout suggests an organized process for calculating the required materials, costs, and inventories for the month.

In this question, we need to prepare direct materials budget for the month ending January 31, 2022.…

Sheffield Company has 2,080 pounds of raw materials in its December 31, 2021, ending inventory. Required production for January and February of 2022 are 5,200 and 6,500 units, respectively. Two pounds of raw materials are needed for each unit, and estimated cost per pound is $5. Management desires an ending inventory equal to 20% of next month's materials requirements. Prepare the direct materials budget for January. SHEFFIELD COMPANY Direct Materials Budget For the Month Ending January 31, 2022 $ $

Sheffield Company has 2,080 pounds of raw materials in its December 31, 2021, ending inventory. Required production for January and February of 2022 are 5,200 and 6,500 units, respectively. Two pounds of raw materials are needed for each unit, and estimated cost per pound is $5. Management desires an ending inventory equal to 20% of next month's materials requirements. Prepare the direct materials budget for January. SHEFFIELD COMPANY Direct Materials Budget For the Month Ending January 31, 2022 $ $

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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Concept explainers

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.

Question

Sheffield Company has 2,080 pounds of raw materials in its December 31, 2021, ending inventory. Required production for January and February of 2022 are 5,200 and 6,500 units, respectively. Two pounds of raw materials are needed for each unit; and the estimated cost per pound is $5. Management desires an ending inventory equal to 20% of next month’s materials requirements.

Prepare the direct materials budget for January.

---

**Graph/Diagram Explanation:**

There is a section titled **"SHEFFIELD COMPANY Direct Materials Budget"** with a dropdown for selecting the date range, which is set to "For the Month Ending January 31, 2022."

Below this title, there are several blank fields organized in a tabular format that appear to be used for inputting budgetary figures. These fields are intended for entering data for the preparation of the direct materials budget, but no specific numbers or detailed labels are shown in the image. The layout suggests an organized process for calculating the required materials, costs, and inventories for the month.

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