Reference no: EM132552421

Tulum Inc. makes a Mexican chocolate mix sold in 4-pound boxes. Planned production in units for the first 3 months of the coming year is:

January................................24,700

February..............................22,000

March.................................30,200

Each box requires 4.2 pounds of chocolate mix and one box. Company policy requires that ending inventories of raw materials for each month be 10% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of 1 pound of chocolate mix is $1.50. The cost of one box is $0.10.

Required:

Question 1. Calculate the ending inventory of chocolate mix in pounds for December of the prior year and for January and February. What is the beginning inventory of chocolate mix for January?

Question 2. Prepare direct materials purchases budget for chocolate mix for the months of January and February.

Question 3. Calculate the ending inventory of boxes for December of the prior year and for January and February.

Question 4. Prepare direct materials purchases budget for boxes for the months of January and February