The Bakery produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays $2.50 per pound of the organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months:. Data Table
July 1,500 loaves
August 1,880 loaves
September 1,680 loaves
October 1,560 loaves
The bakery has a policy that it will have 20% of the following month's flour needs on hand at the end of each month. At the end of June, there were 150 pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.
Begin the direct materials by determining the total quantity needed, then complete the budget.
July August September Quarter
Units to be produced
Multiply by: Pounds of flour needed per unit
Quantity needed (Ibs) for production
Plus: Desired ending inventory of direct materials
Total quantity (lbs) needed

The Bakery

Direct materials budget

For the third quarter of year 202x

                                                  July         August    September      Quarter

Budgeted production units     1,500         1,880         1,680              5,600

Materials required per unit         0.5             0.5            0.5                 0.5

Materials needed for Px             750           940           840              2,530

+ Desired ending inventory        188            168            156                  156

Total materials required             938          1,108           996              2,686

- Beginning inventory               -150           -188           -168                 -150

Units to be purchased                788           920           828               2,536

Cost per unit                            $2.50        $2.50        $2.50              $2.50

Total cost materials costs      $1,970      $2,300      $2,070            $6,340

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