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Direct Materials Budget Example

Explore direct materials budget example.

The Direct Materials Budget

  • At Royal Company, five pounds of material are required per unit of product.
  • Management wants materials on hand at the end of each month equal to 10% of the following month’s production.
  • On March 31, 13,000 pounds of material are on hand. Material cost is $0.40 per pound.


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Review the example and make sure to understand how to create a Direct Material budget.


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