Gutierrez Company has 1,600 pounds of raw materials in its

Gutierrez Company has 1,600 pounds of raw materials in its December 31, 2012, ending inventory. Required production for January and February of 2013 are 4,000 and 5,500 units, respectively. Two pounds of raw materials are needed for each unit, and the estimated cost per pound is $6. Management desires an ending inventory equal to 20% of next month’s materials requirements. Prepare the direct materials budget for January.


Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...

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