Dewitt Industries has adopted the following production budget for the first 4 months of 2012.
Month / Units
January 11,200
February 7,900
March 5,400
April 3,600
Each unit requires 5 pounds of raw materials costing $2 per pound. On December 31, 2011, the ending raw materials inventory was 17,360 pounds. Management wants to have a raw materials inventory at the end of the month equal to 31% of next month’s production requirements. Complete a direct materials purchases budget by month for the first quarter. (Enter all amounts as positive amounts and subtract where necessary.)
January February March
Units to be produced
Direct Materials per Unit
Total Pounds Needed for Production
Add: Desired Ending Direct Material (pounds)
Total Material Required
Less: Beginning Direct Material (pounds)
Direct Materials Purchases
Cost per Pounds
TOTAL COST OF DIRECT MATERIAL PURCHASES