PLEASE SHOW WORK On January 1, 2014, the Hardin Company budget committee has rea
ID: 2420795 • Letter: P
Question
PLEASE SHOW WORK
On January 1, 2014, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2014.
The ending raw materials and finished goods inventories at December 31, 2013, follow the same percentage relationships to production and sales that occur in 2014. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.
1quarter 2quarter
Expected Unit Sales: ____________________ _______________________
Add Desired Ending Finished Goods Unit:____________________ _______________________
Total Required Units: ____________________ _______________________
Less Begining Finished Goods Unit: ____________________ _______________________
Required Production Units: ____________________ _______________________
Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2014.
Units to be Produced: ____________________ _______________________
Direct Materials per unit: ____________________ _______________________
Total Pounds Needed for Production: ____________________ _______________________
Add: Desired Ending Direct Materials ____________________ _______________________
Total Materials Required: ____________________ _______________________
Less Beginning Direct Materials: ____________________ _______________________
Direct Materials Purchases: ____________________ _______________________
Cost Per Pound: ____________________ _______________________
Total Cost of Direct Materials Purchases: ____________________ _______________________
Sales units: First quarter 5,000; second quarter 6,000; third quarter 7,000 Ending raw materials inventory: 40% of the next quarter’s production requirements Ending finished goods inventory: 25% of the next quarter’s expected sales units Third-quarter production: 7,200 unitsExplanation / Answer
Statement showing computations Particulars Q1 Q2 Q3 Sales in Units 5,000.00 6,000.00 7,000.00 Ending FG @25% of next Quarter Sales 1,500.00 1,750.00 1,950.00 Opening FG 1,500.00 1,750.00 Production = Sales + Ending - Opening 6,250.00 7,200.00 Raw mat reqd for prod'n @3 18,750.00 21,600.00 Ending Raw Material Inv @40% 7,500.00 8,640.00 Opening = Ending of prev month 7,500.00 8,640.00 Raw Materials Purchased = Prod +Cl -Op 19,890.00 Purchase Cost @4 79,560.00
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