Production and Purchases Budgets At the beginning of October, Comfy Cushions had
ID: 2529138 • Letter: P
Question
Production and Purchases Budgets
At the beginning of October, Comfy Cushions had 1,800 cushions and 11,500 pounds of raw materials on hand. Budgeted sales for the next three months are:
Comfy Cushions wants to have sufficient raw materials on hand at the end of each month to meet 25 percent of the following month's production requirements and sufficient cushions on hand at the end of each month to meet 20 percent of the following month's budgeted sales. Five pounds of raw materials, at a standard cost of $0.90 per pound, are required to produce each cushion.
Required
a. Prepare a production budget for October and November.
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b. Prepare a purchases budget in units and dollars for October.
Do not use a negative sign with your answers.
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***Please show work for all boxes***
Month Sales October 9,000 cushions November 11,000 cushions December 14,000 cushionsExplanation / Answer
a) Production budget :
Direct material budget :
October November December Sales unit 9000 11000 14000 Add: Desired ending inventory 2200 2800 Total 11200 13800 Less: Beginning inventory -1800 -2200 Production units 9400 11600Related Questions
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