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Sergeeva-Olga [200]
4 years ago
5

Preston, Inc., manufactures wooden shelving units for collecting and sorting mail. The company expects to produce 300 units in J

uly and 360 units in August. Each unit requires 12 feet of wood at a cost of $1.30 per foot. Preston wants to always have 260 feet of wood on hand in materials inventory. Compute Preston's direct materials purchases budget for July and Augus
Business
1 answer:
ZanzabumX [31]4 years ago
4 0

Answer:

Direct material purchase budget for July and August= <u> $10634</u>

Explanation:

T<em>he material purchases budget is determined by adding the the closing stock of materials to the material usage budget and subtracting the opening inventory of materials.</em>

<em>Material purchase budget= Material usage budget + closing inventory - opening inventory</em>

Material budget=

                                               Unit

July  =           300×12       = 3600

August  =       360  ×   12 = <u>4320 </u>                

                                             7920

Closing inventory                 <u>260</u>

                                              8180

cost per unit                        <u>    × $1.30</u>

                                          <u> $10634</u>

Direct material purchase budget for July and August= <u> </u><u>$10634</u>

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