Question:
Elctro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending finished goods inventory for the 1st quarter will be 80,180 units. The following unit sales of the transmissions are expected during the rest of the year: 2nd quarter 211,000 units, 3rd quarter 497,000 units and 4th quarter 239,000 units. Company policy calls for the endinf finished goods inventory of a quarter to equal 38% of the next quarter's budgeted sales. (Ending inventory for the 1st quarter does not comply with company policy.) Each transmission requires 0.57 pouns of a key raw material. Electro Company aims to end each quarter with an ending inventory of dorect materials equal to 38% of next quarter's budgeted materials requirements. Direct materials cost $169 per unit.Prepare a direct materials budger for the 2ndquarterwith the following:2nd quarter's budgeted production units is 391,680 units, materials needed for production pounds is 182,218 lbs. Budgeted beginning inventory is 69,243 lbs. What is Budgeted ending inventory lbs and materials price per lb? $296 per lbs is not correct