ABC Inc. manufactures bedding sets. The budgeted production is for 55,000 comforters in2012. Each comforter requires 7 yards of material. So 385,000 yards will be needed. Theestimated January 1, 2012, beginning inventory is $124,000 in material. The desired endingbalance is $120,000 in material. If the material costs $4.00 per yard, determine the directmaterials budget for 2012
Darshita Changed status to publish July 26, 2020
A)
Material required for production (yards)
= 55,000*7
= 385,000
So,Material required for production (yards) = 385,000 yards
| Material required for production | 385000 |
| Add: Desired ending inventory ($120000/$4) | 30000 |
| Less; Beginning inventory ($124000/$4) | -31000 |
| Direct materials purchases required (yards) | 384000 |
b)
| Direct materials purchases required (yards) | 384000 |
| Multiplied by :Material price per yard x $4 | X $4 |
| Cost of Material to be purchased | 1536000 |
Darshita Changed status to publish July 26, 2020
