SCHEDULE3 Hampton Freeze, Inc. Direct Materials Budget For the Year Ended Decemb
ID: 2564434 • Letter: S
Question
SCHEDULE3 Hampton Freeze, Inc. Direct Materials Budget For the Year Ended December 31, 2017 Assumed Year a Required production in cases (Schedule 2) s Units of raw materials needed per case t unts of raw materials needed to meet production 210 000 480 000 2 Add desired units of ending raw materials inventory 48 00054000128 500 22500 14,000 32000 36,000 19 000 101.000 000 285.000/1.515.000 220 Total units of raw materials needed 4 Less units of beginning raw materials inventory 258 000534 000 568 500 307 500 8 000-54 000 8 500 1 537 500 21,000 Units of raw materials to be purchased Cost of raw materials per pound -237000-486,000-514500-279000-1516500 s 020 S 020 S 020 $ 020 20 17 Cost of raw materials to be purchased 18 19 7400) 597 200 $102900 $55 800 $ 303 30 50 Schedule of Expected Cash Disbursements tor Purchases of Materials 21 25,800 47 400 97 200 $25.8 S 22 Beginning accounts payable $23 700 48 600 S 48.600 a2 First-quarter purchases 24 Second-quarter purchases 2s Third-quarter purchases s Fourth-quarter purchases 27 Total cash disbursements for materials 51,450 $51,450 102.900 27 900 27900 $49 500 $72300 $100 050 $79350 $301 200 percent of the next quarter's production needs. For example, the second-quarter production needs are 480,000 pounds. Therefore, the desired ending inventory for the first quarter would be 10% x 480000 pounds-48000 pounds. The desired ending inventory for quarter 4 (22,500 pounds) assumes the first quarter production needs in 2018 are 225,000 pounds (-225,000 pounds × 10% = 22,500 pounds). Cash Ten payments for last year's fourth-quarter purchases. See the beginning-of-year balance sheet in Exhibit 8-3. $47,400 50%; $47,400 × 50%. 4$97,200 × 50%; $97,200 × 50%. 3102.900 x 50% $102.900 × 50%. $5580 × 50% Unpaid fourth-quarter purchases $27,900 appear as accounts payable on the company's endof year budgeted balance sheet (see Schedule 10)Explanation / Answer
Direct Materials Budget for musk oil
For Year 2
Year 2 Year 3
Q1 Q2 Q3 Q4 total Q1
1. Required production ( in bottles) 60000 90000 150000 100000 400000 70000
2. Grams of musk oil needed per bottle 3 3 3 3 3 3
3.Grams of musk oil needed to meet 180000 270000 450000 300000 1200000 210000
production
4. Add: Desired grams of oil to be kept 54000 90000 60000 42000 246000
at the end
5. Total grams of musk oil needed 234000 360000 510000 342000 1446000
6. Less: Grams of oil at the beginning 36000 54000 90000 60000 240000
7. Grams of oil to be purchased 198000 306000 420000 282000 1206000
8. Cost of musk oil per gram $ 1.5 $ 1.5 $ 1.5 $ 1.5 $ 1.5
9. Total cost of musk oil to be purchased $ 297000 $ 459000 $ 630000 $ 423000 $ 1809000
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