Smoke Inc Makes and Sells Buckets $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { April } \quad \text { May }\quad \quad\text { June }$

question 121

Essay

Smoke Inc. makes and sells buckets. Each bucket uses 1/2 pound of plastic. Budgeted production of buckets in units for the next three months is as follows: $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { April } \quad \text { May }\quad \quad\text { June }$
$\text { Budgeted production } \quad 21,000 \quad22,000 \quad\quad 24,000$ The company wants to maintain monthly ending inventories of plastic equal to 25% of the following month's budgeted production needs. The cost of plastic is $2.20 per pound.
Instructions
Prepare a direct materials purchases budget for the month of May.

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Definitions:

Equilibrium Price

The price at which the quantity of a product offered for sale equals the quantity of that product in demand.

Air Cargo

Goods being transported by aircraft, often for commercial purposes or rapid delivery.

Pollutants

Substances or objects that cause pollution, negatively affecting air, water, or soil quality.

Marginal Benefit

The additional satisfaction or utility gained by consuming one more unit of a good or service.