Electro Company budgets production of 550,000 transmissions in the second quarter and 625,000 transmissions in...
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Accounting
Electro Company budgets production of 550,000 transmissions in the second quarter and 625,000 transmissions in the third quarter. Each transmission requires 0.8 pounds of a key raw material. The Company aims to end each quarter with an ending inventory of direct materials equal to 20% of next quarters budgeted materials requirements. Beginning inventory of this raw material is 88,000 pounds. Direct materials cost $1.80 per pound. Prepare a direct materials budget for the second quarter.
ELECTRO COMPANY
Direct Materials Budget
Second Quarter
Budgeted production (units)
550,000
units
Materials needed for production (lbs.)
Total materials requirements (lbs.)
Materials to be purchased (lbs.)
Budgeted cost of direct materials purchases
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