Preparing a Direct Materials Budget
Can any one help with this question. I am confused about how the assumed numbers arrived at. So, I cannot complete the problem.
One quarter gram of a rare seasoning is required for each bottle of Dipping Oil/ a
Very popular product sold through gountlet shops that is produced by The Lucas
Company. The cost ofth"e seasoning is $16 per gram. Budgeted production of
"Dipping Oil is given below for the second quarter, and the first month9fthe third
Quarter.
Required production bottles .
April
5,000
May
8,000
June
15,000
July
10,000
The'seasoning is so difficult to get that the company must have on hand at the end
Of each month 20% of the next month's production needs. A total of 250 grams
Will be on hand at the beginning of April.
Required:
Prepare a direct materials budget for the seasoning, by month and in total for tile
Second quarter. Be sure to include both the quantity to be purchased and its cost
For each month.
|