Question

Raw Materials Purchases Budget 2020 July August September TOTAL October Units Produced Yards of RM Required...

  • Raw Materials Purchases Budget
    2020
    July August September TOTAL October
    Units Produced
    Yards of RM Required Per Unit of FG
    Total Yards Used in Production
    Plus: Desired Yards in Ending Inventory
    Total Yards Required
    Less: Yards in Beginning Inventory
    RAW MATERIALS PURCHASES (YARDS)
    Cost per Yard
    RAW MATERIALS PURCHASES (COST)
  • Please fill the raw material budget
  • Each mask is referred to as a finished good unit. Although the company makes both adult and children’s sizes, each mask will be treated the same.
  • Budgeted sales in units are as follows:
    • July – 222,000 masks
    • August – 290,000 masks
    • September – 216,000 masks
    • October – 165,000 masks
    • November – 197,000 masks
  • Each unit sells for $7.75.
  • The company sells their masks to merchandisers. All sales are on account. The company’s collection pattern is:
    • 70 % of sales are collected in the month of sale
    • 30 % are collected in the month following the sale
  • The company desires to have finished goods inventory (masks) on hand at the end of each month equal to 20% of the following month’s budgeted sales in units. On June 30, 2020, the company had 44,400 masks on hand.
  • .2 yards of fabric are required for each mask produced. The company desires to have materials on hand at the end of each month equal to 30% of the following month’s production needs. On June 30, 2020, the company had 14,136 yards of fabric on hand.
  • The fabric used in production costs $14.00 per yard. The company’s payment pattern is:
    • 60% of the month’s purchases are paid for in the month of purchase
    • 30% are paid for in the month following the purchase
  • Each mask requires 3 minutes (0.2 hours) of labor time to make and the hourly employees are paid $18/hour. Wages are paid in the month incurred.

Variable manufacturing overhead is $0.75 per mask

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