Question

Magnolia, Inc., manufactures bedding sets. The budgeted production is for 17,700 comforters this year. Each comforter requires 7 yards of material. The estimated January 1 beginning inventory is 4,870 yards with the desired ending balance of 5,400 yards of material. If the material costs $4.70 per yard, determine the materials budget for the year. $

Answer 1

Answer:

Explanation:

Calculation of materials budget for 2012

Budgeted production units (A)  17,700

Material Required per unit (Yards) (B)  7

Total Material required (C) = A*B (Yards)  123,900

Add: Desired Ending material inventory  5,400

Less: Beginning Material inventory  (4,870)

Material to be purchased (Yards)  124,430

Price Per yard  $4 .70

Cost of Material to be purchased $584,821

Answer 2

Answer:

$584,821

Explanation:

This can be calculated using the following simple equation:

Budgeted yards of material = Desired ending balance + Materials required – Beginning material

Material required = 17,700 × 7 = 123,900 yards

Budgeted yards of material = 5,400 + 123,900 – 4,870 = 124,430

Materials budget for the year = Budgeted yards of material × Material costs per yard

                                                = 124,430 × $4.70

Materials budget for the year = $584,821

Therefore, Magnolia, Inc. materials budget for the year is $584,821.