Written Problems 21. (10 points) AJJ Co. makes bird feeders and expects sales un
ID: 2581020 • Letter: W
Question
Written Problems 21. (10 points) AJJ Co. makes bird feeders and expects sales units for the first three months of 2018 to be as follows Jan Eeb Mar 320 260 380 Total Sales quantity (units) The December 31, 2017, inventories were as follows Finished goods inventory Raw materials inventory 60 bird feeders 80 pounds Each bird feeder requires two pounds of raw material, which costs $1.50 per pound The company's management desires to have the following inventory levels (in units) at the end ot each respective month: Jan Feb Mar Finished goods inventory units 52 76 80 Raw materials inventory pounds 142 192 200 a. Prepare a production budget by month for the first three months of 2018. b. Prepare a direct material purchases budget by month for the first three months of 2018 Jan Feb Mar a) Production Budget Budgeted production units (b) Direct Materials Purchases Budget tal budgeted direct material purchases in dollarsExplanation / Answer
Jan Feb Mar Total sales Unit 320 260 380 (a) Production budget a Sales Units 320 260 380 b Closing Units 52 76 80 c Opening units (60) (52) (76) d Production (a+b-c) 312 284 384 Budgeted production units 312 284 384 (b) Direct Material Purchase Budget e Production 312 284 384 f No of raw material per unit 2 2 2 g Total raw material required (e*f) 624 568 768 h Material consumed (g) 624 568 768 i Closing stock of raw material 142 192 200 j Opening stock of raw material (80) (142) (192) k Purchased of raw material (h+i-j) 686 618 776 l Cost of raw material $ 1.50 $ 1.50 $ 1.50 m Total Purchase $ 1,029 $ 927 $ 1,164
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