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avanturin [10]
3 years ago
7

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 5,200; second quarter 6,700; 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: 7,380 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 $5 per pound.
a) Prepare a production budget by quarters for the 6-month period ended June 30, 2020.
b) Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2020.
Business
1 answer:
notsponge [240]3 years ago
3 0

Answer:

Hardin Company

Production budget

For the first semester of 2020

                                   First quarter        Second quarter        Total

Sales units                  5,200                  6,700                         11,900

Planned ending          1,675                   1,750                          1,750

<u>inventory                                                                                                 </u>

Total production         6,875                  8,450                         13,650

required

<u>- beginning inv.           -1,300                 -1,675                          -1,300   </u>

Units to be                   5,575                 6,775                           12,350

produced

Hardin Company

Raw materials budget

For the first semester of 2020

                                   First quarter        Second quarter        Total

Units to be                   5,575                 6,775                           12,350

produced

Materials required          3                         3                                   3

<u>per unit                                                                                                    </u>

Materials needed        16,725               20,325                        37,050

for production

Planned ending           8,130                 8,856                           8,856

<u>inventory                                                                                                 </u>

Total materials             24,855              29,181                          45,906

needed

<u>- beginning inv.           -6,690                -8,130                          -6,690  </u>

Materials to be             18,165                21,051                         39,216

purchased

<u>Cost per unit                    $5                      $5                                $5    </u>

Total cost of                $90,825           $105,255                    $196,080

direct materials

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