Question

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.

Sales units: First quarter 5,000; second quarter 6,900; third quarter 7,300.
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, 2019, follow the same percentage relationships to production and sales that occur in 2020. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $6 per pound.

Prepare a production budget by quarters for the 6-month period ended June 30, 2020.

HARDIN COMPANY
Production Budget

choose the accounting periodFor the Six Months Ending June 30, 2020For the Quarter Ending June 30, 2020June 30, 2020 For the Six Months Ending June 30, 2020June 30, 2020For the Quarter Ending June 30, 2020

Quarter

1

2

Six
Months

select an opening production budget itemTotal Required UnitsBeginning Finished Goods UnitDirect Materials Per UnitDesired Ending Finished Goods UnitDirect Materials PurchasesTotal Materials RequiredDesired Ending Direct MaterialsExpected Unit SalesRequired Production UnitsBeginning Direct Materials Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units

enter a number of units

enter a number of units

select between addition and deductionAddLess AddLess: select a production budget itemDesired Ending Direct MaterialsDirect Materials Per UnitExpected Unit SalesBeginning Finished Goods UnitDesired Ending Finished Goods UnitRequired Production UnitsTotal Required UnitsDirect Materials PurchasesBeginning Direct MaterialsTotal Materials Required Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units

enter a number of units enter a number of units

select a summarizing line for the first partTotal Materials RequiredExpected Unit SalesBeginning Direct MaterialsDesired Ending Finished Goods UnitBeginning Finished Goods UnitDesired Ending Direct MaterialsDirect Materials PurchasesDirect Materials Per UnitTotal Required UnitsRequired Production Units Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units

enter a total number of units for the first part

enter a total number of units for the first part

select between addition and deductionAddLess AddLess: select a production budget itemDirect Materials PurchasesTotal Materials RequiredBeginning Direct MaterialsBeginning Finished Goods UnitDirect Materials Per UnitDesired Ending Direct MaterialsDesired Ending Finished Goods UnitExpected Unit SalesRequired Production UnitsTotal Required Units Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units

enter a number of units enter a number of units

select a closing production budget itemBeginning Finished Goods UnitDirect Materials PurchasesDesired Ending Direct MaterialsDirect Materials Per UnitRequired Production UnitsTotal Required UnitsDesired Ending Finished Goods UnitExpected Unit SalesTotal Materials RequiredBeginning Direct Materials Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units

enter a total number of units enter a total number of units enter a total number of units

Homework Answers

Answer #1

SOLUTION

Production Budget

Quarter 1 Quarter 2 Six months
Expected unit sales 5,000 6,900 11,900
Add: Desired ending finished goods inventory 1,725 1,825 1,825
Total required units 6,725 8,725 13,725
Less: Beginning finished goods inventory (1,250) (1,725) (1,250)
Required production units 5,475 7,000 12,475

Desired ending finished goods inventory = 25% * Next quarter's finished goods inventory

Quarter 1 = 25% * 6,900 = 1,725

Quarter 2 = 25% * 7,300 = 1,825

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