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ezto.mheducation.com SecuriCorp Operates A Fleet Of Armored Cars Chapter 9 Homew

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Question

ezto.mheducation.com SecuriCorp Operates A Fleet Of Armored Cars Chapter 9 Homework Chapter 8 Homework Chegg Study | Guided Solutions and Study H Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company's products. The company is now planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements a. The finished goods inventory on hand at the end of each month must be equal to 3,000 units of Supermix plus 25% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 13,250 units b. The raw materials inventory on hand at the end of each month must be equal to one-half of the following month's production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 60,000 cc of solvent H300. c. The company maintains no work in process inventories. A sales budget for Supermix for the last six months of the year follows. Budgeted Sales in Units 41,000 46,000 56,000 36,000 26,000 16,000 July August October November December Required: 1. Prepare a production budget for Supermix for the months July, August, September, and October Pearl Products Limited Production Budget July AugustSeptember October Budgeted unit sales Total needs Required production in units

Explanation / Answer

1.Production Budget for Supermix for the months of July , August, September and October

                                      Pearl Products Limited

                                        Production Budget

July

August

September

October

Budgeted unit sales

41000

46000

56000

36000

Add: Closing Inventory

14500

17000

12000

9500

Total Needs

55500

63000

68000

45500

Less: Opening Inventory

(13250)

(14500)

(17000)

(12000)

Required Production in units

42250

48500

51000

33500

Working Notes:Calculation of Closing Finished Goods=3000units+25%(next month’s sales)

July: 3000 units+25%( 46,000)=14500 units

Aug: 3000 units+ 25%(56000)=17000 units

Sept: 3000 units+25%(36000)=12000 units

Oct: 3000 units+25% (26000)=9500 units

3. Quantity of Direct Materials Budget showing quantity of solvent H300 to be purchased

                                               Pearl Products Limited

                                        Direct Materials Budget

July

August

September

Third Quarter

Units of raw materials

Needed to meet production

126750

145500

153000

100500

Add: Closing inventory of

Raw Materials

72750

76500

50250

35250

Total units of Raw Material

Needed

199500

222000

203250

135750

Less: Opening inventory of

Raw Materials

60000

72750

76500

50250

Units of raw material to be

Purchased

139500

149250

126750

85500

Working Notes:

1)Raw Material required for production:

July: 42250 units*3cc=126750 cc

Aug:48500 units*3cc=145500 cc

Sept:51000 units*3cc=153000 cc

Oct:33500 units*3cc=100500 cc

2.Closing stock of raw material: 50%( Raw materials required for next month’s production)

July: 48500*3/2= 72750cc

Aug:51000*3/2=76500 cc

Sept:33500*3/2=50250 cc

Oct: 23500*3/2=35250 cc

                                      Pearl Products Limited

                                        Production Budget

July

August

September

October

Budgeted unit sales

41000

46000

56000

36000

Add: Closing Inventory

14500

17000

12000

9500

Total Needs

55500

63000

68000

45500

Less: Opening Inventory

(13250)

(14500)

(17000)

(12000)

Required Production in units

42250

48500

51000

33500