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16 September, 00:04

19. The Svelte Jeans Company produces two different types of jeans. One is called the "Simple Life" and the other is called the "Fancy Life". The Production Budget requires 353,500 units of Simple Life jeans and 196,000 Fancy Life jeans be manufactured. The Simple Life jeans require 3 yards of denim material; the Fancy Life jeans require 4.5 yards of denim material. Each yard of denim material costs $3.25. There is 15,000 yards of denim on hand at the beginning of the year. The desired amount of ending inventory is 22,750 yards. Prepare a Direct Materials Purchases Budget for denim.

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  1. 16 September, 00:34
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    See explanation section

    Explanation:

    Svelte Jeans Company

    Direct Materials Budget

    Simple Life Fancy Life Total

    Budgeted production (unit) 353,500 196,000 549500

    Denim Material per unit * 3 * 4.5

    Budgeted Material needed 1,060,500 882,000 1,942,500

    Add: Ending materials needed 22,750 22,750 45,500

    Total need 1,063,250 904,750 1,988,000

    Less: Beginning materials need 15,000 15,000 30,000

    Total direct materials 1,048,250 889,750 1,958,000
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