Instructions Prepare a 2014 production budget for Kroger. The following budget i
ID: 2491035 • Letter: I
Question
Instructions Prepare a 2014 production budget for Kroger. The following budget information relates to the Amazon corporation for lt product called Prime: It takes 4 pounds of direct materials to produce the Prime product. It is the company's policy to maintain an inventory of direct materials on hand at the end of each month equal to 15% of the next month's production needs. Direct materials inventory on hand at June 30 were 20,060 pounds. The cost per pound of materials is S6 for Deluxe. For the second quarter of 2015, prepare a direct materials budget for the Prime product.Explanation / Answer
Amazon Corporation Direct Materials Budget Production details April May June Total Jul Budgeted Production 15,000 10,000 14,000 39,000 12,000 Required Direct Material for production @4lb/unit 60,000 40,000 56,000 156,000 48,000 Add Required Direct Material closing inventory = 6,000 8,400 7,200 21,600 Less Opeing Inventory Direct Materials 20,000 6,000 8,400 Required Purchase of Direct Materials lbs= 46,000 42,400 54,800 Rate of Direct Material per lb 6 6 6 Direct Material Purchase Amount $ 276,000 254,400 328,800 859,200