Prepare separate direct materials budgets for each product

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Reference no: EM131056213

Berry company manafactures two products, (1) Regular (2) Deluxe. The budgeted units to be produced are as follows:

2015 Regular Deluxe

January 10,000 15,000

February 6,000 10,000

March 9,000 14,000

April 8,000 12,000

It takes 3 pound of direct materials to produce the regular product and 5 pounds of direct materials to produce the deluxe product. It is the company's policy to maintain an inventory of direct materials on hand at the end of each month equal to 30% of the next month's production needs for the regular product and 20% of the next month's production needs for the Deluxe product. Direct material inventory on hand at 31 december 2014 were 8800 pounds for the regular product and 14600 pounds for the deluxe product. The cost per pound of material is $6 regular and $8 deluxe. Prepare separate direct materials budgets for each product for the first quarter of 2015.

Reference no: EM131056213

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