Kittle Corporation has two products; AB and CD. The beginning and ending balances of finished...
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Accounting
Kittle Corporation has two products; AB and CD. The beginning and ending balances of finished goods and raw materials inventories are presented below.
|
| Products |
| Raw Materials | ||
|
| AB | CD | X | Y | |
| Beginning Inventory | 12,000 units | 6,500 units | 120 kg | 24,000 units | |
| Target Ending Inventory | 8,000 units | 3,500 units | 320 kg | 18,000 units | |
| Expected Sales | 35,000 units | 15,000 units |
|
| |
Each unit of AB requires the use of 15gr of X and 2 units of Y whereas each unit of CD requires the use of 20gr of X and 4 units of Y.
Throughout this year, company paid $12 for 1 kg of X and $14 for a unit of Y. However, it is projected that 1 kg of X will be sold in the market from $14/kg and each unit of Y from $16 next year.
- Prepare the production budget. (10 pts)
- Prepare the DM Purchase Budget. (15 pts)
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