Exercise 21-6 (Part Level Submission) On January 1, 2017, the Hardin Company bud
ID: 2509948 • Letter: E
Question
Exercise 21-6 (Part Level Submission) On January 1, 2017, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2017.
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Exercise 21-6 (Part Level Submission) On January 1, 2017, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2017 First quarter 5,800; second quarter 6,700; third quarter 7,200 40% of the next quarter's production requirements 25% of the next quarter's expected sales units 7,800 units. Sales units: Ending raw materials inventory: Ending finished goods inventory: Third-quarter production: The ending raw materials and finished goods inventories at December 31, 2016, follow the same percentage relationships to production and sales that occur in 2017. 4 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $5 per poundExplanation / Answer
Answer
Q1
Q2
Six months
Required Production Units
6025
6825
12850
Raw material per unit
4
4
4
Raw material requirement
24100
27300
51400
Add: Desired Ending raw material pound
[27300 x 40%] 10920
[7800 x 4 x 40%] 12480
12480
Total requirement in pounds
35020
39780
63880
Less: Beginning Raw material pound
[24100 x 40%] 9640
10920
9640
Raw material to be purchased in pounds
25380
28860
54240
Per pound raw material cost
$5
$5
$5
Raw material purchase cost
$126900
$144300
$271200
Q1
Q2
Six months
Required Production Units
6025
6825
12850
Raw material per unit
4
4
4
Raw material requirement
24100
27300
51400
Add: Desired Ending raw material pound
[27300 x 40%] 10920
[7800 x 4 x 40%] 12480
12480
Total requirement in pounds
35020
39780
63880
Less: Beginning Raw material pound
[24100 x 40%] 9640
10920
9640
Raw material to be purchased in pounds
25380
28860
54240
Per pound raw material cost
$5
$5
$5
Raw material purchase cost
$126900
$144300
$271200
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