Answer:
1. Direct Materials Budget Units( bottles) 66,000 102,000 140,000 94,000 Total 452,000
2. Costs Raw Materials $ 297,000 $ 459,000 $ 630,000 $ 423,000
Total 2034,000
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Explanation:
Direct Materials Budget in Bottles & Grams
Year 2 Year 3
First Second Third Fourth First
Budgeted production, 60,000 90,000 150,000 100,000 70,000
Desired Ending Inventory
20 % 0f the Production 18,000 30,000 20,000 14,000
Less Beginning Inventory
<u>36,000/ 3 12,000 18,000 30,000 20,000 14,000</u>
D. Materials Budget 66,000 102,000 140,000 94,000
<u>Grams in a Bottle 3 3 3 3 </u>
Raw Materials gms 198,000 306,000 420,000 282,000
<u>Costs $1.50 $1.50 $1.50 $1.50 </u>
<u>Costs Raw Materials $ 297,000 $ 459,000 $ 630,000 $ 423,000 </u>
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<em>We add the desired ending inventory to the budgeted production and subtract the beginning inventory to get the direct materials budget in bottles. This is again multiplied with 3 gms and the cost per gram to get the total costs of the total grams. Each bottle contains 3 grams. </em>
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Direct Materials Budget in Bottles & Grams
Year 2
First Second Third Fourth Total
Budgeted production, 60,000 90,000 150,000 100,000 450,000
Add Desired Ending Inventory
20 % 0f the Production 18,000 30,000 20,000 14,000 82,000
Less Beginning Inventory
<u>36,000/ 3 12,000 18,000 30,000 20,000 80,000 </u>
D. Materials 66,000 102,000 140,000 94,000 452,000
<u>Grams in a Bottle 3 3 3 3 3 </u>
Raw Materials 198,000 306,000 420,000 282,000 1356,000
<u>Costs $1.50 $1.50 $1.50 $1.50 1.50 </u>
<u>Costs Raw Materials $ 297,000 $ 459,000 $ 630,000 $ 423,000 </u>
<u>Total $ 2034,000</u>
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