ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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adding the beginning inventory of raw materials to the raw materials needed to meet the production schedule and subtracting the desired ending inventory of raw materials
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adding the desired ending inventory of raw materials to the raw materials needed to meet the production schedule.
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subtracting the beginning inventory of raw materials from the raw materials needed to meet the production schedule.
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adding the desired ending inventory of raw materials to the raw materials needed to meet the production schedule and subtracting the beginning inventory of raw materials
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Detailed explanation-1: -The correct answer is answer choice C.) Beginning inventory-ending inventory + raw materials used.
Detailed explanation-2: -Budgeted direct material purchases in units = Budgeted beginning direct material in units + Direct material in units necessary for production-Budgeted ending direct material in units.
Detailed explanation-3: -When preparing a direct materials budget, beginning inventory for raw materials should be added to production needs and desired ending inventory should be subtracted to determine the amount of raw materials to be purchased.
Detailed explanation-4: -The formula for this budget is as follows: Quantity of Direct Materials Needed for Production + Desired Ending Materials Balance-Beginning Materials = Direct Materials to be Purchased.
Detailed explanation-5: -Product Cost = Direct Materials + Direct Labor + Manufacturing Overhead. Beginning DM Inventory + DM Purchases-Ending DM Inventory = Direct Material Used. 200 pounds beginning + 100 pounds purchased-225 pounds ending = 75 pounds used. More items •18-May-2022