On January 1, 2017, the Hardin Company budget committee agreed on the following data for the 6-month period ending June 30, 2017.

Sales units:		First quarter 6,000; second quarter 6,900; third quarter 7,400
Finished raw material inventory:		40% of next quarter's production requirements
End of finished product inventory:		25% of expected sales units of the next quarter
Third quarter production:		7,840 units.

Inventories of raw materials and finished goods ending on December 31, 2016 follow the same percentage relationships with production and sales in 2017. It takes 4 pounds of raw materials to make each unit of product. Purchased raw materials are expected to cost $5 per pound.

Prepare a direct material budget on a quarterly basis for the 6-month period ending 30 June 2017

Answer rating: 100% (QA)

To determine the required raw materials purchases for the second quarter we need to calculate the pr... View the full answer