Preparation of direct materials budget for Husky Pasta Company
Husky Pasta Company (HPC) produces a hand-processed gourmet pasta that is made with organic flour. Five (5) kilograms of organic flour are required per batch of gourmet pasta. The organic flour costs $2.40 per kilogram. The company needs to have 30% of the following month's production needs of organic flour in ending inventory so it is on hand to start each month. A total of 180 kilograms of organic flour are expected to be on hand on April.
1. Budgeted production of the gourmet pasta for the month from April through July follow:
Number of batches of pasta to be produced in April 600
Number of batches of pasta to be produced in May 750
Number of batches of pasta to be produced in June 800
Number of batches of pasta to be produced in July 700
What would the direct materials budget be for organic flour, for each of the months in the second quarter and for the second quarter in total (HPC's fiscal year is the calendar year). (Hint: be sure to include the quantity of flour to be purchased and the cost of the flour purchases in each month.)© SolutionLibrary Inc. solutionlibary.com January 18, 2020, 8:46 pm 9836dcf9d7 https://solutionlibrary.com/business/accounting/preparation-of-direct-materials-budget-for-husky-pasta-company-jdf3