Prepare a Direct Material Purchase Budget with the following information.

Q.2 Prepare a Direct Material Purchase Budget with the following information.

Plastic is the only direct material used in Framecraft’s picture frames.

Each picture frame required 8 ounces of plastic.

Framecraft’s Purchasing Department has estimated the cost of the plastic used in the picture frames at $ 0.06 per ounce.

Assume that each quarter’s desired units of ending direct materials inventory become the next quarter’s desired units of beginning direct materials inventory.

Framecraft’s desired level of ending direct materials inventory is 10 percent of the next quarter’s budgeted production unit.

Beginning inventory of direct materials for the first quarter is 12000 whereas the ending direct material inventory for the fourth quarter is 20000.

(2 Marks)

Answer