Answer:
See explanation section
Explanation:
Peanut Land Inc.
Direct Materials Purchases Budgets
For the month of January and February
January February
Budgeted sales 36,000 38,000
+ ending inventory 9,500 10,250
Production available 45,500 48,250
<u>- beginning inventory 9,300 9,500 </u>
Total production 36,200 38,750
<u>Per unit material 24 ounces 24 ounces</u>
Total raw mater 868,800 930,000
<u>+ ending materials 93,000 99,600 (1)</u>
Materials available 961,800 1,029,600
<u>- Beginning inventory 86,880 93,000</u>
Budgeted Direct materials 874,920 936,600
Calculation:
(1) Ending materials inventory for February = [(March sales + Ending inventory - Beginning Inventory) × Per unit material] × 10% of the March Production
Therefore, Ending materials inventory for February = [(41,000 + 10,750 - 10,250) × 24 ounces] × 10%
Ending materials inventory for February = 99,600