80.2K

Verified Solution

Link Copied!

On January 1, 2017, the Blue Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2017.

Sales units:		First quarter 5,700; second quarter 6,200; third quarter 7,200
Ending raw materials inventory:		40% of the next quarters production requirements
Ending finished goods inventory:		25% of the next quarters expected sales units
Third-quarter production:		7,670 units.

The ending raw materials and finished goods inventories at December 31, 2016, follow the same percentage relationships to production and sales that occur in 2017. 4 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.

(a)

Prepare a production budget by quarters for the 6-month period ended June 30, 2017.

BLUE COMPANY Production Budget For the Six Months Ending June 30, 2017For the Quarter Ending June 30, 2017June 30, 2017
	Quarter
		1		2		Year
Beginning Finished Goods UnitTotal Required UnitsExpected Unit SalesDirect Materials PurchasesTotal Materials RequiredDirect Materials Per UnitBeginning Direct MaterialsRequired Production UnitsDesired Ending Finished Goods UnitDesired Ending Direct Materials
AddLess: Desired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials PurchasesDirect Materials Per UnitBeginning Finished Goods UnitRequired Production UnitsTotal Materials RequiredBeginning Direct MaterialsTotal Required UnitsExpected Unit Sales
Total Required UnitsRequired Production UnitsDesired Ending Direct MaterialsTotal Materials RequiredDirect Materials PurchasesDesired Ending Finished Goods UnitBeginning Direct MaterialsExpected Unit SalesDirect Materials Per UnitBeginning Finished Goods Unit
AddLess: Required Production UnitsDesired Ending Finished Goods UnitTotal Materials RequiredBeginning Finished Goods UnitDirect Materials PurchasesDesired Ending Direct MaterialsTotal Required UnitsBeginning Direct MaterialsExpected Unit SalesDirect Materials Per Unit
Direct Materials Per UnitDesired Ending Finished Goods UnitExpected Unit SalesTotal Required UnitsDirect Materials PurchasesTotal Materials RequiredBeginning Finished Goods UnitDesired Ending Direct MaterialsRequired Production UnitsBeginning Direct Materials

eTextbook and Media

Attempts: 0 of 3 used

Save for LaterSubmit Answer

Answer & Explanation Solved by verified expert

See Answer