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    Preparation of direct materials budget for Husky Pasta Company

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    Husky Pasta Company (HPC) produces a hand-processed gourmet pasta that is made with organic flour. Five (5) kilograms of organic flour are required per batch of gourmet pasta. The organic flour costs $2.40 per kilogram. The company needs to have 30% of the following month's production needs of organic flour in ending inventory so it is on hand to start each month. A total of 180 kilograms of organic flour are expected to be on hand on April.

    1. Budgeted production of the gourmet pasta for the month from April through July follow:
    Number of batches of pasta to be produced in April 600
    Number of batches of pasta to be produced in May 750
    Number of batches of pasta to be produced in June 800
    Number of batches of pasta to be produced in July 700

    What would the direct materials budget be for organic flour, for each of the months in the second quarter and for the second quarter in total (HPC's fiscal year is the calendar year). (Hint: be sure to include the quantity of flour to be purchased and the cost of the flour purchases in each month.​)

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    Solution Summary

    The solution contains the complete computation of the quantity of direct materials to be purchased and their budgeted cost, for the entire quarter and in total for Husky Pasta Company.