Norton Manufacturing expects to produce 2,300
by | Mar 18, 2020 | Uncategorized
Norton Manufacturing expects to produce 2,300 units in January and 3,000 units in February. Norton budgets $35 per unit for direct materials. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is $37,650.
Norton desires the ending balance in Raw Materials Inventory to be 70 % of the next month’s direct materials needed for production. Desired ending balance for February is $50,600.
What is the cost of budgeted purchases of direct materials needed for January?
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