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Exercise 23-6

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 5,700; 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.

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

HARDIN COMPANY Production Budget June 30, 2017 For the Quarter Ending June 30, 2017 For the Six Months Ending June 30, 2017 Quarter 1 2 Six Months Total Materials Required Direct Materials Per Unit Expected Unit Sales Total Required Units Desired Ending Direct Materials Beginning Finished Goods Unit Desired Ending Finished Goods Unit Beginning Direct Materials Direct Materials Purchases Required Production Units Add Less : Beginning Direct Materials Expected Unit Sales Total Materials Required Desired Ending Finished Goods Unit Required Production Units Beginning Finished Goods Unit Total Required Units Desired Ending Direct Materials Direct Materials Per Unit Direct Materials Purchases Beginning Direct Materials Total Materials Required Desired Ending Finished Goods Unit Direct Materials Per Unit Direct Materials Purchases Expected Unit Sales Required Production Units Total Required Units Beginning Finished Goods Unit Desired Ending Direct Materials Add Less : Direct Materials Per Unit Required Production Units Desired Ending Finished Goods Unit Direct Materials Purchases Expected Unit Sales Total Materials Required Beginning Direct Materials Total Required Units Beginning Finished Goods Unit Desired Ending Direct Materials Total Required Units Total Materials Required Desired Ending Direct Materials Required Production Units Direct Materials Per Unit Direct Materials Purchases Expected Unit Sales Desired Ending Finished Goods Unit Beginning Finished Goods Unit Beginning Direct Materials

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

HARDIN COMPANY Direct Materials Budget For the Quarter Ending June 30, 2017 For the Six Months Ending June 30, 2017 June 30, 2017 Quarter 1 2 Six Months Direct Labor Time Per Unit Beginning Direct Materials Units to be Produced Total Direct Labor Cost Cost Per Pound Desired Ending Direct Materials Total Materials Required Direct Labor Cost Per Hour Direct Materials Purchases Direct Materials Per Unit Total Required Direct Labor Hours Total Cost of Direct Materials Purchases Total Pounds Needed for Production Desired Ending Direct Materials Units to be Produced Direct Materials Purchases Total Materials Required Cost Per Pound Direct Materials Per Unit Total Required Direct Labor Hours Beginning Direct Materials Direct Labor Time Per Unit Total Cost of Direct Materials Purchases Direct Labor Cost Per Hour Total Direct Labor Cost Total Pounds Needed for Production Direct Materials Purchases Direct Labor Cost Per Hour Total Pounds Needed for Production Cost Per Pound Units to be Produced Beginning Direct Materials Direct Materials Per Unit Direct Labor Time Per Unit Total Direct Labor Cost Total Cost of Direct Materials Purchases Total Materials Required Total Required Direct Labor Hours Desired Ending Direct Materials Add Less : Beginning Direct Materials Cost Per Pound Total Direct Labor Cost Direct Materials Purchases Total Cost of Direct Materials Purchases Direct Labor Cost Per Hour Direct Materials Per Unit Total Required Direct Labor Hours Units to be Produced Desired Ending Direct Materials Total Materials Required Total Pounds Needed for Production Direct Labor Time Per Unit Total Materials Required Cost Per Pound Total Pounds Needed for Production Total Required Direct Labor Hours Direct Labor Cost Per Hour Direct Materials Purchases Desired Ending Direct Materials Direct Labor Time Per Unit Direct Materials Per Unit Units to be Produced Beginning Direct Materials Total Cost of Direct Materials Purchases Total Direct Labor Cost Add Less : Direct Labor Time Per Unit Units to be Produced Total Materials Required Direct Materials Purchases Direct Materials Per Unit Total Direct Labor Cost Total Cost of Direct Materials Purchases Total Pounds Needed for Production Beginning Direct Materials Total Required Direct Labor Hours Cost Per Pound Desired Ending Direct Materials Direct Labor Cost Per Hour Beginning Direct Materials Total Pounds Needed for Production Total Required Direct Labor Hours Units to be Produced Cost Per Pound Total Materials Required Desired Ending Direct Materials Direct Labor Cost Per Hour Direct Materials Purchases Direct Materials Per Unit Direct Labor Time Per Unit Total Cost of Direct Materials Purchases Total Direct Labor Cost Beginning Direct Materials Total Materials Required Cost Per Pound Direct Labor Time Per Unit Direct Materials Purchases Desired Ending Direct Materials Direct Materials Per Unit Direct Labor Cost Per Hour Total Cost of Direct Materials Purchases Total Direct Labor Cost Total Pounds Needed for Production Total Required Direct Labor Hours Units to be Produced $ $ Total Materials Required Direct Materials Purchases Direct Labor Cost Per Hour Total Cost of Direct Materials Purchases Desired Ending Direct Materials Beginning Direct Materials Total Direct Labor Cost Direct Materials Per Unit Total Pounds Needed for Production Total Required Direct Labor Hours Units to be Produced Cost Per Pound Direct Labor Time Per Unit $ $ $

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