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Question $2$ Question $2$

On January $1,2017,$ the Hardin Company budget commilttee has reached agreement on the following

data for the $6$ months ending June $30,2017.$

Sales units: First quarter $5,000$; second quarter $6,000$; 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: $7,200$ 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 $2017.$ Three pounds of raw materials

are required to make each unit of finished goods. Raw materials purchased are expected to cost $$4$

per pound.

Instructions

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

$($b$)$ Prepare a direct materials budget by quarters for the $6-$month period ended June $30,$

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

Sales units: First quarter $5,000$; second quarter $6,000$; 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: $7,200$ 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 $2017.$ Three pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $$4$ per pound.

Instructions

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

$($b$)$ Prepare a direct materials budget by quarters for the $6-$month period ended June $30,$

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