Question

A company manufactures product X. The company requires 8 pounds of raw material to produce each...

A company manufactures product X. The company requires 8 pounds of raw material to produce each unit of X. The company expects sales as follows: October 15,000 units, November 28,000 units, December 49,000 units, January 9,000 units, and February 7,000 units. The company has 4,200 pounds of raw materials and 4,000 units of finished goods on hand at the end of September. The company’s accounting policies require the company to have 10% of the next month’s sales and 25% of the next month’s raw materials needs on hand at the end of the month.

Construct a raw materials purchases budget for the manufacture of product X for the fourth quarter.

Homework Answers

Answer #1

Solution:

Production Budget - Quarter 4
Particulars Amount
Budgeted Sales units 92000
Desired Ending inventory (9000*10%) 900
Total needs 92900
Less: Beginning inventory 4000
Budgeted Production units 88900
Production Budget - January
Particulars Amount
Budgeted Sales units 9000
Desired Ending inventory (7000*10%) 700
Total needs 9700
Less: Beginning inventory 900
Budgeted Production units 8800
Raw Material Purchase Budget - Quarter 4
Particulars Amount
Budgeted Production units 88900
Raw material requirement per unit (In pound) 8
Total Raw material requirement 711200
Add: Desired Ending inventory (8800*8*25%) 17600
Total needs 728800
Less: Beginning inventory 4200
Budgeted Purchases of raw material (In pound) 724600
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
Tempting Toys manufactures and distributes a number of products to retailers. One of these products, Playclay,...
Tempting Toys manufactures and distributes a number of products to retailers. One of these products, Playclay, requires five pounds of material A135 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter—July, August, and September. Peak sales of Playclay occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements:    a. The finished goods inventory on hand at the end...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each...
Osage, Inc., has actual sales for May and June and forecast sales for July, August, September,...
Osage, Inc., has actual sales for May and June and forecast sales for July, August, September, and October as follows: Actual: May 5,930 units June 6,240 units Forecast: July 5,910 units August 6,890 units September 5,630 units October 5,210 units Required: a. The firm’s policy is to have finished goods inventory on hand at the end of the month that is equal to 70% of the next month’s sales. It is currently estimated that there will be 4,137 units on...
Exercise 8-10 Production and Direct Materials Budgets [LO8-3, LO8-4] Pearl Products Limited of Shenzhen, China, manufactures...
Exercise 8-10 Production and Direct Materials Budgets [LO8-3, LO8-4] Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished...
Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one...
Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each month must equal 4,000 units of Supermix plus 25% of the next month’s sales....
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout Southeast Asia. Three cubic centimeters...
Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout Southeast Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each month...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT