3. A sales budget is given below for one of the products manufactured by the OMI...
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3. A sales budget is given below for one of the products manufactured by the OMI Co.: January 25,000 units 40,000 units February March 65,000 units April 45,000 units May 35,000 units June 30,000 units The inventory of finished goods at the end of each month must equal 20% of the next month's sales. However, on December 31, the finished goods inventory totalled only 4,000 units. Each unit of product requires three kilograms of specialized material. Since the production of this specialized material by OMI's suppliers is sometimes irregular, the company has a policy of maintaining an ending inventory at the end of each month equal to 30% of the next month's production needs. This requirement had been met on January 1 of the current year. Required: Prepare a budget showing the quantity of material to be purchased each month for January, February, and March, and in total for the quarter. 3. A sales budget is given below for one of the products manufactured by the OMI Co.: January 25,000 units 40,000 units February March 65,000 units April 45,000 units May 35,000 units June 30,000 units The inventory of finished goods at the end of each month must equal 20% of the next month's sales. However, on December 31, the finished goods inventory totalled only 4,000 units. Each unit of product requires three kilograms of specialized material. Since the production of this specialized material by OMI's suppliers is sometimes irregular, the company has a policy of maintaining an ending inventory at the end of each month equal to 30% of the next month's production needs. This requirement had been met on January 1 of the current year. Required: Prepare a budget showing the quantity of material to be purchased each month for January, February, and March, and in total for the quarter.
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Production Budget January February March April Budgeted Sales 25000 40000 65000 45000 Ending I... View the full answer
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0131495388
12th edition
Authors: Charles T. Horngren, Srikant M. Datar, George Foster
Posted Date:
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