When preparing a direct materials budget, the units of raw material needed to meet production should be added to desired ending inventory and the beginning inventory for raw materials should be subtracted to determine the amount of raw materials to be purchased.

Question

Quizplus · Accepted Answer

This is the correct method for calculating the amount of raw materials to be purchased for a direct materials budget. Beginning inventory is subtracted and desired ending inventory is added in order to ensure that enough raw materials are available for production.

When Preparing a Direct Materials Budget, the Units of Raw