Preparing an operating budget—direct materials budget Bell expects to produce 1,800 units in January and 2,155 units in February. The company budgets 3 pounds per unit of direct materials at a cost of $10 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 4,950 pounds. Bell desires the ending balance in Raw Materials Inventory to be 20% of the next month’s direct materials needed for production. Desired ending balance for February is 4,860 pounds. Prepare Bell’s direct materials budget for January and February.

Question

Preparing an operating budget—direct materials budget

Bell expects to produce 1,800 units in January and 2,155 units in February. The company budgets 3 pounds per unit of direct materials at a cost of $10 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 4,950 pounds. Bell desires the ending balance in Raw Materials Inventory to be 20% of the next month’s direct materials needed for production. Desired ending balance for February is 4,860 pounds. Prepare Bell’s direct materials budget for January and February.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Budgeting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Using Excel for cost-volume-profit (CVP) analysis Download an Excel temp/ate for this problem online...

A: As the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the answer...

Q: Use the following information for Short Exercises S21-4 and S21-5. Dracut Company reports the follow...

A: Under Variable costing method, Fixed Manufacturing overheads are treated as a part of period cost He...

Q: 2.​A restaurant bakes its own bread for a cost of $165 per unit (100 loaves), including fixed costs ...

A: The differential analysis is made by the company to measure the difference in the cost and revenue o...

Q: 5. A business operated at 100% capacity during its first month of operations, with the following res...

A: Variable costing income statement refers to all the variable costs which are subtracted from income ...

Q: What is a Review engagement?

A: Auditing:   Auditing refers to the procedure for providing independent report over the presentation...

Q: According to which concept the owners are considered to be different from the business:  [A] busine...

A: Accounting concepts: Accounting concepts are the basis for preparing the financial statements and ac...

Q: Mel Snow is the manager of a firm, Taxation Matters, which specialises in the preparation of income ...

A: Calculations: Activity based costing rate: Obtain missing data number of follow up calls = 8000 Acti...

Q: What is the purpose of Transaction Tagging?

A: Tagging and tracking transaction: In tagging and tracking transaction technique, the auditor puts a...

Q: SafeData Corporation has the following account balances and respective fair values on June 30:Privac...

A: As you posted many sub parts in questions we are answering the First 3 sub parts only. Kindly repost...