Sales units: first-quarter 5600, second-quarter 6400, third-quarter 7000 Ending
ID: 2575510 • Letter: S
Question
Sales units: first-quarter 5600, second-quarter 6400, third-quarter 7000 Ending raw material inventory: 40% of the next quarter‘s production requirements Ending finished goods inventory: 25% of the next quarter’s expected sales units Third-quarter production: 7440 The ending wrong materials and finished goods inventory at December 31, 2016, follow the same percentage relationships to production and sales that occur in 2017. 5 pounds of raw materials are required to make each unit of finished goods. Ron materials purchased are expected to cost four dollars per pound.Prepare a direct materials budget by quarters for the six-month period ended June 30, 2017 Kimmel, Accounting, 6e Gradebook ORION Downloadable eTextbook ent HARDIN COMPANY Direct Materials Budget For the Six Months Ending June 30, 2017 Quarter Six Months Units to be Produced Direct Materials Per Unit Total Pounds Needed for Production ddDesired Ending Direct MM Required LessBeginning Direct Materials otoriet ASon,Inc. All Rights Reserved. A Division of John wilcy & SonsInc re to search oe F1 F2 F3 F4 FS F6 F7 F8 F9 F10
Explanation / Answer
Quarter 1 Quarter 2
Units to be produced 5800 6550
Direct materials per unit 5 5
Total pounds needed for production 29000 32750
Add: Desired ending raw materials 13100 14880
Total materials requires 42100 47630
Less: Beginning direct materials 11600 13100
Direct material purchases 30500 34530
Cost per pound 4 4
Total cost of direct material purchases 122000 138120
Now, units to be produced for quarter 1 = 5600 + 0.25*(6400-5600)
units to be produced for quarter 2 = 6400 + 0.25,*(7000-6400)
Now, desired ending inventory for quarter 1 = 0.4*32750
For quarter 2 = 0.4*5*7440
In this similar way, other values are calculated
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