Prepare a direct materials purchases budget, Financial Accounting


Mosman Ltd produces a single product. The projected sales for the first month of the coming year and the beginning and ending inventory data are as follows:


80,000 units

Unit price


Beginning inventory

6,000 units

Desired ending inventory

9,000 units

Each unit requires three kilograms of material costing $2 per kilogram. The beginning inventory of raw materials is 2,500 kilograms, and the company wants to have 4,500 kilograms of material in inventory at the end of the month. Each unit requires one hour of direct labour time, which is billed at $8 per hour.

(A) Prepare a production budget for the first month.

(B) Prepare a direct materials purchases budget for the first month in kilograms and dollars.

(C) With which estimate does budgeting begin? Explain why this is so and provide examples to illustrate your understanding.

Posted Date: 2/18/2013 4:50:50 AM | Location : United States

Related Discussions:- Prepare a direct materials purchases budget, Assignment Help, Ask Question on Prepare a direct materials purchases budget, Get Answer, Expert's Help, Prepare a direct materials purchases budget Discussions

Write discussion on Prepare a direct materials purchases budget
Your posts are moderated
Related Questions
Stark Company has five employees. Employees paid by the hour receive a $10 per hour pay rate for the regular 40-hour work week plus one and one-half times the hourly rate for each

The matching rule is applied a. because it is required by the Internal revenue Code b. by expensing certain items immediately and in their entirety c. to help make the bookkeeper's

An investment project requires a net investment of $100,000. The project is expected to generate annual net cash inflows of $28,000 for the next 5 years. The firm's cost of capital

Evaluate 1-1/3(5/6 - 1/2) ---------------- 2/5 / 2/5(5/6-2/3)

The Wanless Corporation provides Internet consulting services to a wide-range of customers. The company's fiscal year ends on December 31. For the year ended December 31, 2011, the

what managers should know about internal rate of return (IRR) and why?

This is partly taken from a court case where one of my colleagues was a witness. Suppose that an employee is terminated without cause and that she sues the company for compensation

Bell Mountain Vineyards is considering updating its current manual accounting system with a high-end electronic system. While the new accounting system would save the company mon

Gomez incurred $350,000 of research and development costs to develop a product for which a patent was granted on January 2, 2008. Legal fees and other costs associated with the reg

Refer to Note 8, Securitization Transactions (pp. 78-80) and an extract from Note 2, Additional Balance Sheet and Cash Flow Information (p. 72-73) from the Consolidated Financial S