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15 April, 17:19

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.

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  1. 15 April, 17:47
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    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.
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