Milligan Manufacturing Company produces and sells garden tools.The company has developed the following production plan for its new electric trimmer.
$$\begin{array}{lcccc}
& \underline{\text { January }} & & \underline{\text { February }} && \underline{\text { March }} && \underline{\text { April }} \
\text { Budgeted production } & & \
\text { in units } & 4,000 & & 4,000& & 5,000&& 6,000
\end{array}$$
Each unit requires three feet of metal tubing. The company wishes to have ending inventory equal to 110% of its next month’s production needs, plus an additional 100 feet. January’s beginning inventory meets this requirement. Milligan’s standard cost per foot is $2.80.

Required

Prepare the 1st quarter direct materials purchases budget for metal tubing.

Question

Milligan Manufacturing Company produces and sells garden tools.The company has developed the following production plan for its new electric trimmer.
 $$\begin{array}{lcccc} 
& \underline{\text { January }} & & \underline{\text { February }} && \underline{\text { March }} && \underline{\text { April }} \
\text { Budgeted production } & &  \
\text { in units } & 4,000 & & 4,000& & 5,000&& 6,000
\end{array}$$ 
Each unit requires three feet of metal tubing. The company wishes to have ending inventory equal to 110% of its next month’s production needs, plus an additional 100 feet. January’s beginning inventory meets this requirement. Milligan’s standard cost per foot is $2.80.

Required

Prepare the 1st quarter direct materials purchases budget for metal tubing.

Quizplus · Accepted Answer

The Answer of Milligan Manufacturing Company produces and sells garden tools.The company has developed the following production plan for its new electric trimmer.
 $$\begin{array}{lcccc} 
& \underline{\text { January }} & & \underline{\text { February }} && \underline{\text { March }} && \underline{\text { April }} \
\text { Budgeted production } & &  \
\text { in units } & 4,000 & & 4,000& & 5,000&& 6,000
\end{array}$$ 
Each unit requires three feet of metal tubing. The company wishes to have ending inventory equal to 110% of its next month’s production needs, plus an additional 100 feet. January’s beginning inventory meets this requirement. Milligan’s standard cost per foot is $2.80.

Required

Prepare the 1st quarter direct materials purchases budget for metal tubing.

Milligan Manufacturing Company Produces and Sells Garden Tools Each Unit Requires Three Feet of Metal Tubing