Budgeting Production and Purchases and Just$-$In$-$Time Materials Inventory

Hancock Manufacturing, Inc. is preparing budgets for the third quarter of the year. Hancock produces only one product in its factory. This product requires $5$ pounds of material B$,2$ pounds of material G$,$ and a component, K$,$ that is purchased from another manufacturer. Hancock operates on a just$-$in$-$time basis for material B$.$ As a result, Hancock maintains no inventory of material B$.$ On July $1,$ the inventory of material G is expected to be $5,000$ pounds and the inventory of component K is expected to be $3,500$ units. Hancock wants the inventories of G and K at September $30,$ to be $20\%$ less than the inventories at July $1.$ The inventory of finished products at June $30,$ is expected to be $4,000$ units; the desired inventory at September $30,$ is $6,000$ units to allow a buildup for heavy sales in the fourth quarter. The sales forecast for the third quarter is $15,000$ units at $$300$ each. Budgeted purchase costs are $$10$ per pound for B$,$ $$7$ per pound for G$,$ and $$40$ per component for K$.$

Do not use negative signs with any of your answers below.

a$.$ Prepare the production budget for Hancock Manufacturing, Inc., for the third quarter of the year.

Hancock Manufacturing, Inc.

Production Budget

For the Quarter Ended September $30$

Forecast unit sales Answer

$0$

Desired ending inventory Answer

$0$

Quantity to be available Answer

$0$

Beginning inventory Answer

$0$

Total production to be scheduled Answer

$0$

b$.$ Prepare the direct material budget for Hancock Manufacturing, Inc., for the third quarter of the year.

Hancock Manufacturing, Inc.

Direct Material Budget

For the Quarter Ended September $30$

Material B Material G Component K

Scheduled production Answer

$0$

Answer

$0$

Answer

$0$

X Answer

$0$

X Answer

$0$

X Answer

$0$

Direct material required Answer

$0$

Answer

$0$

Answer

$0$

Desired ending inventories Answer

$0$

Answer

$0$

Answer

$0$

Total to be available Answer

$0$

Answer

$0$

Answer

$0$

Beginning inventory Answer

$0$

Answer

$0$

Answer

$0$

Total units of material to be purchased Answer

$0$

Answer

$0$

Answer

$0$

Unit purchase price X Answer

$0$

X Answer

$0$

X Answer

$0$

Total material purchases Answer

$0$

Answer

$0$

Answer

$0$