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Question 4, E9-24A (similar to) Part 3 of 3
HWScore: 54 Points: 1.4
Preston Manufacturing produces self-watering planters for use in upscale retail establishments. Sales projections for the first five months planters each month to be as follows: (Click the icon to view additional information.) Inventory at the start of the year was 640 planters. The desired inventory of planters at the end of each month should be equal to 20% four pounds of polypropylene (a type of plastic). The company wants to have 10% of the polypropylene required for next month's production costs $0.25 per pound. Read the requirements.
Polypropylene to be purchased.
Start by preparing the direct materials budget through the total quantity needed, then complete the budget.
Preston Manufacturing Direct Materials Budget
For the Months of January through March January February 3,280 3,500
March 3,380
Quarter 10,160
Units to be produced
Multiply by: Quantity of direct materials needed per unit
4
4
Quantity needed for production
13,120 1,400
14,000 1,352 15,352
13,520 1,816 15,336
40,640 1,816
Plus:
Desired ending inventory of direct materials
Total quantity needed
14,520
42,456
Less: Beginning inventory of direct materials Quantity to purchase
Multiply by Cost per pound
0.25
0.25
0.25
0.25
Total cost of direct material purchases
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