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Atlantic Surf manufactures surfboards. The company's budgeted sales units for the next three months is shown below. Company policy is to maintain finished goods inventory
Atlantic Surf manufactures surfboards. The company's budgeted sales units for the next three months is shown below. Company policy is to maintain finished goods inventory equal (in units) to 30% of the next month's unit sales. As of June 30, the company has 1.200 finished surfboards In Inventory July August September Budgeted sales units 4,000 6,700 3,500 Prepare the production budget for the months of July and August. Answer is complete but not entirely correct. ATLANTIC SURF Production Budget July August Budgeted sales units 333.000 415.000 At Desired ending inventory Next period budgeted sales units 415,000 405 000 $ Ratio of inventory to future sales 30% 30% Detired ending inventory units 124,500 121 500 Total required units 457,500 536,500 Less Beginning inventory units 99 300 3 124,500 Units to be produced 357 000 412000 X 5 Miami Solar manufactures solar panels for industrial use. The company budgets production of 6,000 units (solar panels) in July and 5,500 units in August QS 20-9 (Algo) Manufacturing: Direct materials budget LO P1 Each unit requires 4 pounds of direct materials , which cost $7 per pound. The company's policy is to maintain direct materials Inventory equal to 20% of the next month's direct materials requirement. As of June 30, the company has 4.800 pounds of direct materials in Inventory. Prepare the direct materials budget for July MIAMI SOLAR Direct Materials Budget July 6,000 Units to produce Materials required per unit (pounds) Materials needed for production (pounds) Add Desired ending materials inventory Total materials required (pounds) Less Beginning materials inventory (pounds) Materials to be purchased (pounds) Materials cost per pound Cost of direct materials purchases
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