Hayes Company maintains an ending inventory of raw materials equal to 10% of the next quarter’s...

Hayes Company

Inadequate inventories could result in temporary shutdowns of production. Because of its close proximity to suppliers,

Hayes Company maintains an ending inventory of raw materials equal to 10% of the next quarter’s production requirements.

The manufacture of each Kitchen-Mate requires 2 pounds of raw materials, and the expected cost per pound is $4.

Assume that the desired ending direct materials amount is 1,020 pounds for the fourth quarter of 2011.

Prepare a Direct Materials Budget.

HAYES COMPANY Sales Budget For the Year Ending December 31,2011
	Quarter
	1	2	3	4	Year
Expected unit sales	3,000	3,500	4,000	4,500	15,000
Unit Selling price	×$60	×$60	×$60	×$60	×$60
Total sales	$180,000	$210,000	$240,000	$270,000	$900,000