Question

beckeers bikes manufactures tricycles. the company expects to sell 400 units in may and 530 in June. beginning and ending finished goods for may is expected to be 120 and 85 units, respectively. june's ending finished goods is expected to be 95 units. each unit requires 3 wheels at a cost of $10 per wheel. Becker requires 20 percent of next month's material production needs on hand each month. July's production units is expected to be 500 units.

compute becker's direct materials purchases budget with respect to wheels for may and june.

Answer 1

Answer:

Direct Material Purchases Budget  May        $ 14190            

Direct Material Purchases Budget     June      $19200

Explanation:

Beckeers Bikes Manufacturers

                                               May              June        July

Sales                                    400               530

+ Ending Inventory              85                  95

Less Beg. Inventory            120                 85                  

Production Budget            365               540             500 (given)      

Wheels per unit                  3                     3                    3

Total Wheels                   1095                1620           1500

Cost per wheel                $ 10                    $ 10            $ 10

Total Cost                       $ 10950            $ 16200       $ 15000

On hand(20% 0f

next month's production) $3240                $ 3000

Direct Material

Purchases Budget           $ 14190                 $19200

First we find the total production required each month . Then we find the costs. After that we find the Purchases including the on hand inventory.