Waterway Industries has adopted the following production budget for the first 4 months of 2022. Units Month Units Month January 10,200 March February 8.160 April 5,100 4,080 Each unit requires 4 pounds of raw materials costing $6 per pound. On December 31, 2021, the ending raw materials inventory was 8,160 pounds, Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's production requirements. Prepare a direct materials purchases budget by month for the first quarter. WATERWAY INDUSTRIES Direct Materials Purchases Budget For the Quarter Ending March 31, 2022
Waterway Industries has adopted the following production budget for the first 4 months of 2022. Units Month Units Month January 10,200 March February 8.160 April 5,100 4,080 Each unit requires 4 pounds of raw materials costing $6 per pound. On December 31, 2021, the ending raw materials inventory was 8,160 pounds, Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's production requirements. Prepare a direct materials purchases budget by month for the first quarter. WATERWAY INDUSTRIES Direct Materials Purchases Budget For the Quarter Ending March 31, 2022
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Waterway Industries has adopted the following production budget for the first 4 months of 2022.
Month
Units Month Units
January
10,200 March 5,100
4,080
February 8.160 April
Each unit requires 4 pounds of raw materials costing $6 per pound. On December 31, 2021, the ending raw materials inventory
was 8,160 pounds, Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's
production requirements.
Prepare a direct materials purchases budget by month for the first quarter.
Units to be produced
Direct Materials Per Unit
Total Pounds Needed for Production
Add
Desired Ending Direct Materials (Pounds
Total Materials Required
Less
Beginning Direct Materials (Pounds)
WATERWAY INDUSTRIES
Direct Materials Purchases Budget
For the Quarter Ending March 31, 2022
January
February
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