Question

Beckett Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Beckett Industries has a policy that states that the ending Inventory of computer chips shoul be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: (Click the icon to view the production schedule.) Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Beckett Industries Direct Materials Budget For the Months of January through March January February Units to be produced Multiply by: Quantity of direct materials needed per unit Quantity needed for production Plus: Desired ending inventory of direct materials Total quantity needed Less: Beginning inventory of direct materials Quantity to purchase Multiply by: Cost per unit Total cost of direct material purchases NIN Enter any number in the edit fields and then continue to the next question.

Answer 1

Beckett Industries Direct Material Budgets for the Months of January to March Quarter January February March Units To be Produced 5400 4700 14400 4300 Multiply by: Qunatiry of Direct Material Quantity needed ADD: Desired EndingInvenotry Direct Materia Total Quantity Needed Less: Beginning Inventory of Direct Material Quantity to Purchase Multiply by : Cost per Unit Total Cost of Direct Materila Purchases 2 2 2 10800 8600 9400 28800 2150 2350 2100 2100 12950 10950 11500 30900 2150 2350 2700 2700 10250 9150 8800 28200 1 1 1 1 10250 9150 8800 28200 Desired Ending Inventory 25% of next month Quantity Needed Jan FEB 9400*25% Mar 4200*2*25% 8600*25% 2150 2350 2100 =