Question

Shown below are the expected unit sales for Jacks Company for the first quarter of 2018....

Shown below are the expected unit sales for Jacks Company for the first quarter of 2018.

-----January February March

Sales 1,500 2,000 3,000

In addition, expected sales in April and May are 4,000 and 5,000 units, respectively. They have a policy of maintaining a level of ending units sufficient to meet 90% of their sales demand for the following month.
Each finished unit requires four pounds of direct materials. At the beginning of 2018, they had 6,000 pounds of direct materials on hand. They desire ending materials for each month sufficient to meet the following month's production demands. Each pound of direct materials costs $2.

a. Prepare the production budget for the first quarter of 2018.

b. Prepare the purchases budget for the first quarter of 2018.

Homework Answers

Answer #1

Production budget

January February march
Sales 1500 2000 3000
Add: closing inventory 1800 2700 3600
Total 3300 4700 6600
Less: opening inventory 1500 1800 2700
Production 1800 2900 3900

*Opening inventory for january is 6000 pounds divided by 4 = 1500.

*The closing inventory of each month is opening inventory of next month.

2.

Purchase budget

Production for january= 1800 units x 4 x 2 = 14400

Prodection for February= 2900 units x 4 x 2 = 23200

Prodection for March = 3900 units x 4 x 2 = 31200

Total= 68800

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Your company had the following projected unit sales for 2021: 2021 quarter 1: 59,600units 2021 quarter...
Your company had the following projected unit sales for 2021: 2021 quarter 1: 59,600units 2021 quarter 2: 21,300 units 2021 quarter 3: 48,300 units 2021 quarter 4: 54,500 units 2022 quarter 1: 43,400 units -each unit produced needs 5 pounds of direct materials. The company had 29000 pounds of direct materials in its ending inventory on decmeber 31, 2019. The company prefers to keep 15000 pounds of direct materals in ending inventory. -the company had 6500 units in its ending...
XYZ Corporation is preparing a master budget for 2018. Sales for the year are expected to...
XYZ Corporation is preparing a master budget for 2018. Sales for the year are expected to total 1,000,000 units. Quarterly sales in units are 20%,25%,30%, and 25% respectively. The sales price is expected to be $50 per unit for the first 3 quarters and $55 per unit beginning in the fourth quarter. Sales in the first quarter of 2018 are expected to be 10% higher than the budgeted sales volume for the first quarter of 2017. Cash collections from sales...
Paige Company estimates that unit sales will be 11,000 in quarter 1, 12,800 in quarter 2,...
Paige Company estimates that unit sales will be 11,000 in quarter 1, 12,800 in quarter 2, 15,000 in quarter 3, and 18,900 in quarter 4. Management desires to have an ending finished goods inventory equal to 25% of the next quarter’s expected unit sales. Prepare a production budget by quarters for the first 6 months of 2020. PAIGE COMPANY Production Budget choose the accounting period June 30, 2020For the Six Months Ending June 30, 2020For the Quarter Ending June 30,...
Problem 9-4 Karam Inc. has compiled the following data in order to put together their first...
Problem 9-4 Karam Inc. has compiled the following data in order to put together their first quarter operating budget for 2011: January February March April Sales (units) 35,000 31,000 38,000 29,000 Each unit requires three hours of direct labor. Additional information: Karam sells each unit for $95. Company policy is to have 30 percent of next month's sales (in units) in ending finished goods inventory. Company policy is to have 40 percent of next month's production needs in ending raw...
Presented is selected first quarter budget data for the Barney Company: Sales January 25,000 units February...
Presented is selected first quarter budget data for the Barney Company: Sales January 25,000 units February 20,000 units March 42,000 units Additional information: Each unit of finished product requires two pounds of raw materials. Barney maintains ending finished goods inventories equal to 25 percent of the following month's budgeted sales. Barney maintains raw materials inventories equal to 20 percent of the following month's budgeted production. January 1 inventories are in line with Barney's inventory policy. Presented is additional information for...
On January 1, 2020, the Hardin Company budget committee has reached agreement on the following data...
On January 1, 2020, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2020. Prepare production and direct materials budgets by quarters for 6 months. Sales units: First quarter 5,000; second quarter 6,000; third quarter 7,000. Ending raw materials 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: 7,200 units. The ending raw materials and finished goods...
Exercise 23-6 On January 1, 2017, the Hardin Company budget committee has reached agreement on the...
Exercise 23-6 On January 1, 2017, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2017. Sales units: First quarter 5,300; second quarter 6,000; third quarter 7,800 Ending raw materials 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: 7,360 units. The ending raw materials and finished goods inventories at December 31, 2016, follow the same percentage...
Marcy Jones, Bonita & Hill Fabricators' purchasing manager, has just received the company's production budget for...
Marcy Jones, Bonita & Hill Fabricators' purchasing manager, has just received the company's production budget for the first quarter. January February March Quarter Budgeted Production 19,064 34,069 30,189 83,322 Budgeted sales of April is 25,810 and its beginning inventory is 4,646. May month budgeted sales is 20,470. Company policy requires an ending finished goods inventory each month that will meet 18% of the following month’s sales volume. Each brick requires 4.00 pounds of clay, and Marcy expects to pay $0.36...
White Corporation’s budget calls for the following sales for next year: Quarter 1 90,000 units Quarter...
White Corporation’s budget calls for the following sales for next year: Quarter 1 90,000 units Quarter 3 68,000 units Quarter 2 76,000 units Quarter 4 96,000 units Each unit of the product requires 3 pounds of direct materials. The company’s policy is to begin each quarter with an inventory of product equal to 5% of that quarter’s estimated sales requirements and an inventory of direct materials equal to 20% of that quarter’s estimated direct materials requirements for production. Required: 1....
Required information Use the following information for the Exercises below. Ruiz Co. provides the following sales...
Required information Use the following information for the Exercises below. Ruiz Co. provides the following sales forecast for the next four months:     April May June July Sales (units) 650 730 680 770 The company wants to end each month with ending finished goods inventory equal to 20% of next month's forecasted sales. Finished goods inventory on April 1 is 130 units. Assume July's budgeted production is 680 units. In addition, each finished unit requires six pounds (lbs.) of raw...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT