Managerial Accounting: E9-5 Dallas Industries has adopted the following production budget
Managerial Accounting E9-5 Dallas Industries has adopted the following production budget for the first 4 months of 2014. Month Units Month Units January 10,100 March 5,250 February 8,260 April 4,200 Each unit requires 4 pounds of raw materials costing $4 per pound. On December 31, 2013, the ending raw materials inventory was 9,310 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's production requirements.
Instructions: Prepare a direct materials purchases budget by month for the first quarter.