Answer and Explanation:
1.
Direct Material budget
April May June
Budgeted Production (Units) 880 1100 1075
Material required per unit (Pounds)4 4 4
Materials needed for production 3520 4400 4300
Add : Desired Ending Inventory 1760 1720 1800
Total Material Requirements (Pounds) 5280 6120 6100
Less : Beginning Inventory 1408 1760 1720
Materials to be purchased (pounds) 3872 4360 4380
Material price per pound $ 3 $ 3 $ 3
Budgeted Cost of direct material purchases $ 11,616 $ 13,080 $ 13,140
Ending Inventory is 40% of next month production needs
Ending inventory for June can be analysed from chart given above which shows 1800, therefore production for July is = 1800/40% = 4500 units
Beginning Inventory is taken as 40% of current months
2.
Direct Material budget
April May June
Budgeted Production (Units) 880 1100 1075
Material required per unit (Pounds) 4 4 4
Materials needed for production 3520 4400 4300
Add : Desired Ending Inventory 1540 1505 1575
Total Material Requirements (Pounds) 5060 5905 5875
Less : Beginning Inventory 1408 1540 1505
Materials to be purchased (pounds) 3652 4365 4370
Material price per pound $ 3 $ 3 $ 3
Budgeted Cost of direct material purchases $ 10,956 $ 13,095 $ 13,110
Budgeted cost for april will therefore down, as less material is required and needed to be purchased.
