The Direct Materials Budget tells management how much must be purchased to support production and the cost
Question:
The Direct Materials Budget tells management how much must be purchased to support production and the cost of those purchases.
Plain t-shirts are $3.00 each and ink (for screen printing) is $0.20 per ounce. The factory needs one plain t-shirt and five ounces of ink for every logo t-shirt it produces. Texas Rex's policy is to have 10% of next quarter's needs in closing inventory. On January 1, the factory has 58 plain T-shirts and 390 ounces of ink. At year-end, the desired ending inventory is 106 plain T-shirts and 530 ounces of ink.
Production Budget | ||||
Q1 | Q2 | Q3 | Q4 | |
Sales units | 1000 | 1200 | 1500 | 2000 |
Add : Desired Ending Inventory | 240 | 300 | 400 | 200 |
Total Goods Required | 1240 | 1500 | 1900 | 2200 |
Less : Beginning Inventory | 180 | 240 | 300 | 400 |
Production Required | 1060 | 1260 | 1600 | 1800 |
Teksas Rex, Inc.
Direct Material Budget
For the year ended 31 December 2018
Plain T-shirts: Q1 Q2 Q3 Q4 Total
Units to be Produced
Direct Materials per Unit________ _______ ________ _________ ________
Production Needs
Desired Finish Yacht. _______ _______ ________ _________ ________
Total Needs
Less Starter Yacht. _______ _______ ________ _________ ________
Direct Ingredients
to be purchased
Cost per t-shirt _______ _______ ________ _______ ________
Total T-Shirt Purchase
Cost
Mürekkep: Q1 Q2 Q3 Q4 Toplam
Units to be Produced
Direct Materials per Unit________ _______ ________ _________ ________
Production Needs
Desired Finish Yacht. _______ _______ ________ _________ ________
Total Needs
Less Starter Yacht. _______ _______ ________ _________ ________
Direct Ingredients
to be purchased
Cost per ounce _______ _______ ________ _________ ________
Total Ink Purchase Cost
Total Cost
All Direct Ingredients
Direct Labor Budget shows how many hours are required for production and the total cost of those hours. It takes 0.12 hours to produce a t-shirt. Average cost per hour is $10.
Cornerstones of Managerial Accounting
ISBN: 978-0176530884
2nd Canadian edition
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman