Prepare a direct materials purchases budget

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Reference no: EM132214004

Question: A company manufactures widgets. Based on an analysis, we find that each widget needs 3/4 pound of gunk. The following is information on the budgeted production of widgets in units for the following three months:

July August September

Budgeted production 21,000 20,000 24,000

We know that this company desires to maintain monthly ending inventories of â€œgunkâ€ amounting to 25% of the following month's budgeted production needs. The cost per pound of â€œgunkâ€ is $2.12.

Instructions: Prepare a direct materials purchases budget for the month of May.

Reference no: EM132214004

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