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6 September, 02:27

Yasmin expects to produce 2 comma 000 units in January and 2 comma 180 units in February. The company budgets 5 pounds per unit of direct materials at a cost of $ 50 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 5 comma 400 pounds. Yasmin desires the ending balance in Raw Materials Inventory to be 40 % of the next month's direct materials needed for production. Desired ending balance for February is 4 comma 800 pounds. Prepare Yasmin 's direct materials budget for January and February.

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  1. 6 September, 05:10
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    Yasmin Inc.

    Direct Materials Budget

    For the Months of January and February, Year 202x

    January February

    Units to be produced 2,000 2,800

    Direct materials per unit 5 5

    Direct materials need for prod. 10,000 14,000

    Desired ending inventory 5,600 4,800

    Beginning inventory (5,400) (5,600)

    Direct material purchases 10,200 13,200

    Cost per pound $50 $50

    Cost of direct materials $510,000 $660,000

    Explanation:

    month expected production

    January 2,000

    February 2,800

    5 pounds per unit at $50 per pound

    beginning raw materials inventory 5,400 pounds

    desired ending raw materials inventory 4,800 pounds
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