Question

Problems 27-29 (16 points cach) 1. Bannon, Inc, makes yogurt using two ingredients: milk and fruit (disregard packaging Bannon preparing an operating budget for January 2020: Instructions: a) Prepare a production budget for the month of January 2020. Use the following Budgeted unit Sales Beginning Finished Goods Inventory Desired Ending Finished Goods laventory 128,000 units (0.50 pound containers 20,000 units 32.000 units b) Prepare two direct materials (DM) chases bedects for the month of January 2020. Use 140.00 product units and the following data only: Beginning Materials Inventory Desired Ending Materials Inventory Price per pound of material Quantity of material per un Milk 20.000 pounds 14.000 pounds $1.20 ) 0.36 pounds 4.000 pounds 8,000 pounds $3.00 0.14 pounds 1) Milk DM Purchases Budget: 2) Fruit DM Purchases Budget: c) Calculate the Standard Direct Materials (DM) cost for one product unit (one 0.5 pound container). Round to nearest S0.00.

Answer 1

Statement showing Production Budget for the month of January 2020.

Bannon, Inc.
Production Budget for the month of January 2020.
Particulars	No. of Units
Production Budget
Expected Sales during the month	128000
Add: - Ending Inventory (Finished Goods)	32000
Less: - Beginning Inventory (Finished Goods)	-20000
No. of units to be produced	140000

.

Statement showing Direct Material Consumption and Purchase Budget for the month of January 2020.

Particulars	Milk	Fruit
No. of units to be produced	140000	140000
Qty of Raw material (Pounds per unit)	0.36	0.14
Total Raw material required (in Pounds)	50400	19600
Add: - Ending Inventory (Raw Material)	20000	20000
Less: - Beginning Inventory (Raw Material)	-14000	-14000
Qty of Raw material to be Purchased (in Pounds)	56400	25600
Price Per Pound of Material	$1.20	$3.00
Total Purchase amount in $	$67,680	$76,800

.

Statement Showing The Standard Direct Material cost per unit (One 0.5 Pound Container)

Particulars	Per Unit ($)
Milk (0.36 Pound x $1.20 per Pound)	0.43
Fruit (0.14 Pound x $3.00 per Pound)	0.42
Standard Direct material Cost Per Product Unit	0.85