Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Direct Materials Budget Micro Products Inc has developed a very powerful electronic calcu...

Direct Materials Budget Micro Products Inc has developed a very powerful electronic calculator Each calculator requires three small chips that cost $2 each and are purchased from an overseas

Direct Materials Budget

Micro Products, Inc., has developed a very powerful electronic calculator. Each calculator requires three small “chips” that cost $2 each and are purchased from an overseas supplier. Micro Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3, as shown below:

 

 

 

 

The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of chips at the end of a quarter must equal 20% of the following quarter’s production needs. A total of 36,000 chips will be on hand to start the first quarter of Year 2.

Required:

Prepare a direct materials budget for chips, by quarter and in total, for Year 2. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total.

Jun 28 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions