Question
Garver Industries has budgeted the following unit sales: 2017 Units January 10,000 February 8,000 March 9,000 April 11,000 May 15,000 The finished goods units on
Garver Industries has budgeted the following unit sales:
2017 | Units | ||
January | 10,000 | ||
February | 8,000 | ||
March | 9,000 | ||
April | 11,000 | ||
May | 15,000 |
The finished goods units on hand on December 31, 2016, was 2,000 units. Each unit requires 3 pounds of raw materials that are estimated to cost an average of $4 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 8,640 pounds of raw materials on hand at December 31, 2016. For the first quarter of 2017, prepare a production budget.
GARVER INDUSTRIES Production Budget For the Quarter Ended March 31, 2017 | ||||||||||
January | February | March | Total | |||||||
Desired ending finished goods unitsExpected unit salesRequired production unitsTotal required unitsBeginning finished goods unitsCost per poundDirect materials purchases | ||||||||||
Direct materials purchasesCost per poundDesired ending finished goods unitsExpected unit salesRequired production unitsTotal required unitsBeginning finished goods units | ||||||||||
Cost per poundDirect materials purchasesExpected unit salesTotal required unitsRequired production unitsBeginning finished goods unitsDesired ending finished goods units | ||||||||||
AddLess: | Direct materials purchasesExpected unit salesRequired production unitsCost per poundBeginning finished goods unitsTotal required unitsDesired ending finished goods units | |||||||||
Cost per poundTotal required unitsExpected unit salesBeginning finished goods unitsDirect materials purchasesDesired ending finished goods unitsRequired production units |
For the first quarter of 2017, prepare a direct materials budget.
GARVER INDUSTRIES Direct Materials Budget For the Quarter Ended March 31, 2017 | ||||||||||
January | February | March | Total | |||||||
Direct materials purchasesTotal cost of direct materials purchasesTotal pounds needed for productionDirect materials per unitBeginning direct materialsDesired ending direct materialsCost per poundTotal materials requiredUnits to be produced | $ | $ | $ | |||||||
Total pounds needed for productionDirect materials purchasesDirect materials per unitUnits to be producedTotal cost of direct materials purchasesTotal materials requiredDesired ending direct materialsBeginning direct materialsCost per pound | ||||||||||
Cost per poundUnits to be producedDesired ending direct materialsDirect materials purchasesTotal pounds needed for productionBeginning direct materialsDirect materials per unitTotal materials requiredTotal cost of direct materials purchases | ||||||||||
Total materials requiredCost per poundUnits to be producedDirect materials purchasesTotal cost of direct materials purchasesTotal pounds needed for productionDesired ending direct materialsDirect materials per unitBeginning direct materials | ||||||||||
Direct materials purchasesCost per poundTotal materials requiredDirect materials per unitDesired ending direct materialsBeginning direct materialsTotal pounds needed for productionTotal cost of direct materials purchasesUnits to be produced | ||||||||||
AddLess: | Direct materials per unitTotal pounds needed for productionTotal cost of direct materials purchasesBeginning direct materialsTotal materials requiredUnits to be producedCost per poundDirect materials purchasesDesired ending direct materials | |||||||||
Units to be producedDirect materials purchasesDirect materials per unitTotal pounds needed for productionTotal materials requiredDesired ending direct materialsTotal cost of direct materials purchasesCost per poundBeginning direct materials | ||||||||||
Desired ending direct materialsDirect materials per unitDirect materials purchasesCost per poundTotal materials requiredUnits to be producedTotal cost of direct materials purchasesBeginning direct materialsTotal pounds needed for production | ||||||||||
Total cost of direct materials purchasesDirect materials per unitUnits to be producedTotal pounds needed for productionDesired ending direct materialsBeginning direct materialsDirect materials purchasesCost per poundTotal materials required | $ | $ | $ | $ |
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