Question

55. A sporting goods manufacturer budgets production of 47,000 pairs of ski boots in the first quarter and 38,000 pairs in the second quarter of the upcoming year. Each pair of boots require 2 kg of a key raw material. The company aims to end each quarter with ending raw materials inventory equal to 30% of the following quarter's material needs. Beginning inventory for this material is 28,200 kg and the cost per kg is $8. What is the budgeted materials purchases cost for the first quarter?

55B. On February 15, Jewel Company buys 12,000 shares of Marcelo Corp. common stock at $31.03 per share plus a brokerage fee of $650. The stock is classified as available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $2.40 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $31.80 per share less a brokerage fee of $500. The journal entry to record the sale of the 6,000 shares of stock on November 17 is:

Answer 1

			1st Quarter	2nd Quarter
55	Production of ski boots		47000	38000
	Raw Material required per unit		2	2
			94000	76000
	Ending Inventory		22800
	Less : Opening Inventory		-28200
	Total Raw Material Required		88600
	Cost per Kg		$8
			$708,800
	The Budgeted material purchases cost for the first Quarter is $ 708800
55B	Cash		190300
	(6000*31.80)-500
	Brokerage fees		500
	To Profit on sale of investment			4295
	To Invesment in Marcelo Corp			186505
	(Being sale of 6000 shares of Marcelo Corp)