The management of Green Energy Manufacturing is analyzing variable overhead variances for the fiscal period just ended. The flex
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Answer and Explanation:
The preparation of Direct material budget is shown below:-
First Second Third Fourth Year
Required production
in units of
Finished Goods $96,000 $126,000 $186,000 $136,000 $544,000
Units of raw material
needed per unit of
Finished Goods 4 4 4 4 4
Units of raw material
needed to meet
production $384,000 $504,000 $744,000 $544,000 $2,176,000
Add: Desired ending
Finished goods $100800 $148,800 $108,800 $84,800 $84,800
Total units of
Raw material
needed $484,800 $652,800 $852,800 $628,800 $2,260,800
Less: Beginning
inventory ($76,800) ($100,800) ($148,800) ($108,800) ($76,800)
Units of raw material
to be purchased $408,000 $552,000 $704,000 $520,000 $2,184,000
Units cost of Raw
Material $1.90 $1.90 $1.90 $1.90 $1.90
Cost of Raw Material
Purchased $775,200 $1,048,800 $1,337,600 $988,000 $4,149,600
