Michelle Anthony, Sunland & Kevin Fabricators' purchasing manager, has just received the company's production budget for the first
quarter.
January February March Quarter
Budgeted unit sales
25,000 28,000 32,000 85,000
+ Budgeted ending inventory
7,000
8,000 9,500
32,000
36,000 41,500 94,500
9,500
Total units required
- Beginning inventory
3,300
7,000 8,000 3,300
Budgeted production
28,700
29,000 33,500 91,200
Budgeted sales for April is 38,000 units and for May is 26,000 units.
Each brick requires 6 pounds of clay, and Michelle expects to pay $1.50 per pound of clay in the coming year. Company policy requires
an ending direct materials inventory each month that will meet 10% of the following month's production needs. Company policy
requires an ending finished goods inventory each month that will meet 25% of the following month's sales volume. Michelle expects to
have 15,000 pounds of clay at a cost of $22,500 in inventory at the beginning of the year.
Prepare Sunland & Kevin's direct materials purchases budget for the first quarter. (Enter price per pound to 2 decimal places, e.g. 52.75.)
