Reference no: EM131652315
Question - Ajax Chemical Company has estimated that production for the next 5 quarters will be:
Quarter 1, 2017 46,000 units
Quarter 2, 2017 42,000 units
Quarter 3, 2017 50,000 units
Quarter 4, 2017 39,000 units
Quarter 1, 2018 48,000 units
Finished units of production require 4 pounds of raw material per unit. The raw material cost is $4 per pound. There are 45,000 pounds of raw material on hand at the beginning of Quarter 1, 2017. Ajax desires to have 30 percent of next quarter's material requirements on hand at the end of each quarter.
Required: Prepare Quarterly direct materials purchase budget for Ajax Chemicals Company for 2017.
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