Based on the information provided prepare the following operating budgets for 2015: Sales, Production, Direct Material, Direct Labor, Manufacturing Overhead, Ending Inventory, Cost of Goods Sold, Selling, General and Administrative Budgets, and a Budgeted Income Statement. Company X expects sales of its only product in 2015 to be 325,000 units at a price of $50. Company X has beginning inventory valued at $1,000,000 (30,000 units) at the end of 2014, and has a target ending inventory of 50,000 units. Company X has one raw material. Company X requires 3 feet of this raw material for every unit it produces. The cost of this raw material is $5 per foot. Beginning inventory of the raw material was 75,000 feet and desired ending inventory was 180,000 feet. Each unit is expected to require 0.5 hours of labor and the wage offered to all workers is $20 per hour. Manufacturing overhead is based on an allocation base of direct labor hours. The predetermined overhead rate is $10 per hour. For each unit sold, Company X expects to incur $8 in selling, general, and administrative expenses, and fixed SGA of $3,500,000.
(Detailed calculation for COGS budget) How to calculate the direct materials cost