Exercise 23-6 On January Sales units: Ending raw materas inventory: Ending finis

Question

Exercise 23-6 On January Sales units: Ending raw materas inventory: Ending finished goods inventory: Third quarter production 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 6,000; third quarter ?7,300 40% of the 25% of the next quarter's expected sales urity 7,840 units next quarter's production requirements The ending raw materials and finished goods inventories at December 31, 2016, follow the goods. Raw materials purchased are expected to cost $5 per pound Prrgare e production budget by quarters for the 6-month penod ended June 30, 2017

Explanation / Answer

Direct material Budget

for the six month ending June 30 2017

**production:1 : unit sales +ending FG -Beginning FG

        5800+ [6000*.25]-[5800*.25]

           5850

Qtr 2 :6000+[7300*.25]-[6000*.25]

     = 6325

Direct material Budget

for the six month ending June 30 2017

1 2 six month Units produced 5850 6325 Requirement per unit 5 5 Total material required for production 29250 31625   [6325*5] Ending Raw material inventory desired 12650   [31625*.40] 15680   [7840*5*.40] Total requirement 41900 47305 less:Beginning raw material inventory (11700)   [29250*.40] (12650) Material to be purchased 30200 34655 unit cost per unit 5 5 cost of material to be purchased 151000 173275 324275

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