Yordi expects to produce 1,900 units in January and 2,160 units in February. The company budgets four pounds per unit of direct materials at a cost of $20 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 5,300 pounds. Yordi desires the ending balance in Raw Materials Inventory to be 20% of the next month's direct materials needed for production. Desired ending balance for February is 4,400 pounds. Prepare Yordi's direct materials budget for January and February. Begin by preparing the direct materials budget for January and February through total direct materials needed line and then complete the budget by calculating the budgeted cost of direct materials purchases. Yordi Company Direct Materials Budget Two Months Ended January 31 and February 28 January February (1) Budgeted units to be produced 1,900 2,160 Direct materials (pounds) per unit 4 4 Direct materials needed for production 7,600 8,640 Plus: (2) Desired direct materials in ending inventory (pounds) Total direct materials needed Less: (3) Budgeted purchases of direct materials Direct materials cost per pound Budgeted cost of direct materials purchases (1) Budgeted units to be produced Budgeted units to be sold Desired direct materials in ending inventory (pounds) Direct materials in beginning inventory (pounds) (2) Budgeted units to be produced Budgeted units to be sold Desired direct materials in ending inventory (pounds) Direct materials in beginning inventory (pounds) (3) Budgeted units to be produced Budgeted units to be sold Desired direct materials in ending inventory (pounds) Direct materials in beginning inventory (pounds)
Yordi expects to produce 1,900 units in January and 2,160 units in February. The company budgets four pounds per unit of direct materials at a cost of $20 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 5,300 pounds. Yordi desires the ending balance in Raw Materials Inventory to be 20% of the next month's direct materials needed for production. Desired ending balance for February is 4,400 pounds. Prepare Yordi's direct materials budget for January and February. Begin by preparing the direct materials budget for January and February through total direct materials needed line and then complete the budget by calculating the budgeted cost of direct materials purchases. Yordi Company Direct Materials Budget Two Months Ended January 31 and February 28 January February (1) Budgeted units to be produced 1,900 2,160 Direct materials (pounds) per unit 4 4 Direct materials needed for production 7,600 8,640 Plus: (2) Desired direct materials in ending inventory (pounds) Total direct materials needed Less: (3) Budgeted purchases of direct materials Direct materials cost per pound Budgeted cost of direct materials purchases (1) Budgeted units to be produced Budgeted units to be sold Desired direct materials in ending inventory (pounds) Direct materials in beginning inventory (pounds) (2) Budgeted units to be produced Budgeted units to be sold Desired direct materials in ending inventory (pounds) Direct materials in beginning inventory (pounds) (3) Budgeted units to be produced Budgeted units to be sold Desired direct materials in ending inventory (pounds) Direct materials in beginning inventory (pounds)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Topic Video
Question
Yordi
expects to produce
1,900
units in
January
and
2,160
units in
February.
The company budgets
four
pounds per unit of direct materials at a cost of
$20
per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on
January
1 is
5,300
pounds.
Yordi
desires the ending balance in Raw Materials Inventory to be
20%
of the next month's direct materials needed for production. Desired ending balance for
February
is
4,400
pounds. Prepare
Yordi's
direct materials budget for
January
and
February.
Begin by preparing the direct materials budget for
January
and
February
through total direct materials needed line and then complete the budget by calculating the budgeted cost of direct materials purchases.|
Yordi Company
|
|||
|
Direct Materials Budget
|
|||
|
Two Months Ended January 31 and February 28
|
|||
|
|
January
|
February
|
|
|
(1) Budgeted units to be produced
|
1,900
|
2,160
|
|
|
Direct materials (pounds) per unit
|
4
|
4
|
|
|
Direct materials needed for production
|
7,600
|
8,640
|
|
|
Plus:
|
(2) Desired direct materials in ending inventory (pounds)
|
|
|
|
Total direct materials needed
|
|
|
|
Less:
|
(3)
|
|
|
|
Budgeted purchases of direct materials
|
|
|
|
|
Direct materials cost per pound
|
|
|
|
|
Budgeted cost of direct materials purchases
|
|
|
(1)
Budgeted units to be produced
Budgeted units to be sold
Desired direct materials in ending inventory (pounds)
Direct materials in beginning inventory (pounds)
(2)
Budgeted units to be produced
Budgeted units to be sold
Desired direct materials in ending inventory (pounds)
Direct materials in beginning inventory (pounds)
(3)
Budgeted units to be produced
Budgeted units to be sold
Desired direct materials in ending inventory (pounds)
Direct materials in beginning inventory (pounds)
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