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Exercise 10-8 Direct Materials Purchases Budget

Exercise 10-8 Direct Materials Purchases Budget
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ACCOUNTING

MT425 / MT 425
Managerial Finance and Accounting
Kaplan University (KU Campus)

James Jiambalvo
Managerial Accounting, 4e
Hoboken, NJ: John Wiley & Sons.

Unit 8: Budgets and Performance Evaluation

Chapter 10 Exercise 10-8 Direct Materials Purchases Budget [LO 2] Roehler Industrial has estimated that production for the next five quarters will be:

Production Information
1st Quarter, 2011 45,000 units
2nd Quarter, 2011 41,000 units
3rd Quarter, 2011 49,000 units
4th Quarter, 2011 38,000 units
1st Quarter, 2012 47,000 units

Finished units of production require six pounds of raw material per unit. The raw material cost is $5 per pound.There are 54,000 pounds of raw material on hand at the beginning of the first quarter, 2012. Roehler desires to have 20 percent of next quarter’s material requirements on hand at the end of each quarter.

Required
Prepare quarterly direct materials purchases budgets for Roehler Industrial for 2011.

 

FILE: MS WORD

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