Answer:
1. Production units for April 3,650 units
Production units for May 4,200 units
Production units for June 4,370 units
2. Budgeted cost of materials for April = $ 21,980
Budgeted cost of materials for April = $ 23,996
Explanation:
Computation of budgeted production units
April May June
Units Units Units
Ending Inventory - 50 % of next month 1,915 2,285 2,085
Add: Sales 3,470 3,830 4,570
Less: Opening Inventory-50% of current month <u>( 1,735)</u> <u>(1,915)</u> (<u>2,285)</u>
Production units for the month 3,650 4,200 4,370
Computation of cost of materials
Units production 3,650 4,200 4,370
Material requirement per unit - 2 pounds
Total material requirement for production 7,300 8,400 8,740
Closing inventory-50% next month production 4,200 4,370
Opening inventory-50% of current production <u>( 3,650) </u> <u> (4,200)</u>
Total material requirement for production 7,850 8,570
Cost per pound of direct material $ 2.80
Total direct material Budget $ 21,980 $ 23,996
