The Bakery produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays $2.50 per pound of the organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months:

Data Table
July 1,500 loaves
August 1,880 loaves
September 1,680 loaves
October 1,560 loaves

The bakery has a policy that it will have 20% of the following month's flour needs on hand at the end of each month. At the end of June, there were 150 pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.

Begin the direct materials by determining the total quantity needed, then complete the budget.

Data Table

Month July August September The third quarter

Flour budget (pound) 938 pounds 1,108 pounds 996 pounds 3,042 pounds

Flour budget (USD) $2,345 $2,770 $2,490 $7,605

Explanation:

Flour needs to produces organic bread:

In July = 1,500 x 1/2 = 750 pounds

In August = 1,880 x 1/2 = 940 pounds

In September = 1,680 x 1/2 = 840 pounds  

In October = 1,560 x 1/2 = 780 pounds

Flour needs on hand at the end of:

July = 940 x 20% = 188 pounds

August = 840 x 20% = 168 pounds

September = 780 x 20% = 156 pounds

Total flour needs:

In July = 750 + 188 = 938 pounds

In August = 940 + 168 = 1,108 pounds

In September = 840 + 156 = 996 pounds  

In the third quarter = 3,042 pounds

The bakery pays $2.50 per pound of the organic flour used in its loaves.

In July = 938 pounds x $2.50 = $2,345

In August = 1,108 pounds $2.50 = $2,770

In September = 996 pounds  $2.50 = $2,490

In the third quarter = $7,605

Data Table

Month July August September The third quarter

Flour budget (pound) 938 pounds 1,108 pounds 996 pounds 3,042 pounds

Flour budget (USD) $2,345 $2,770 $2,490 $7,605

answer; 33,000;

answer; societal marketing;