Perine Company has 2,284 pounds of raw materials in its December 31, 2016, endin

Question

Perine Company has 2,284 pounds of raw materials in its December 31, 2016, ending inventory. Required production for January and February of 2017 are 4,230 and 5,740 units, respectively. 2 pounds of raw materials are needed for each unit, and the estimated cost per pound is $9. Management desires an ending inventory equal to 27% of next month’s materials requirements.

Prepare the direct materials budget for January. (Round intermediate calculations and final answer to 0 decimal places, e.g. 5,275.)

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Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars January February Required production in units                4,230.00                5,740.00 Pounds per unit                         2.00                        2.00 Pounds required for production                  8,460.00              11,480.00 Ending Inventory = 27% of next onth reqmt                3,099.60 Total Material requirement = 8460 + 3099.60              11,559.60 Less beginning inventory of pounds              (2,284.00) Purchases in pounds                9,275.60 Price per pound                         9.00 Purchases in $ = 9275.60*9              83,480.40

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