Michael Scott Pharmaceuticals Company sells antacid pills. Hennessy has 640 pounds of direct materials on hand at September 1 and desired ending inventory of 880 pounds on September 30. Scott determines that 2,500 pounds of direct materials are needed for production in September. If the cost per unit of direct materials is $0.40, what is the budgeted total cost of direct materials purchases?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Michael Scott Pharmaceuticals Company sells antacid pills. Hennessy has 640 pounds of direct materials on hand at September 1 and desired ending inventory of 880 pounds on September 30. Scott determines that 2,500 pounds of direct materials are needed for production in September. If the cost per unit of direct materials is $0.40, what is the budgeted total cost of direct materials purchases?
Question 14 options:
|
a
|
$1,096 |
|
b
|
$904 |
|
c
|
$1,608 |
| d |
$1,000 |
Step by step
Solved in 2 steps
