Sleep Master manufactures comforters and budgeted 57,000 for 2013. Each comforter requires 6 yards of material costing $1.50 per yard. To determine the materials budget for 2013, the total material required for production (342,000 yards), added to the desired ending inventory (27,000 yards), then subtracted by the beginning inventory (31,000 yards) equals 338,000 yards needed to purchase at $1.50 per yard for a total materials budget of $507,000.

1. Sleep Master, Inc. manufactures bedding sets. The budgeted production is for 57,000 comforters
in 2013. Each comforter requires 6 yards of material. The estimated January 1, 2013, beginning
inventory is 31,000 yards. The desired ending balance is 27,000 yards of material. If the material
costs $1.50 per yard, determine the materials budget for 2013.
a. $519,000
b. $507,000
c. $513,000
d. $510,000
Solution
Solution-
b. $507,000
Calculation-
Budgeted production units (A) 57,000
Material required per unit (Yards) (B) 6
Total Material Required (C) = A*B (Yards) 342,000
Add: Desired Ending material inventory 27,000
Less: Beginning Material inventory 31,000
Material to be purchased (Yards) 338,000
Price per yard $1.50
Cost of Material to be purchased $507,000