Question
Johnson Corporation has the following budgeted sales for the selected four-month period: Month Unit Sales July 20,000 August 35,000 September 25,000 October 30,000 Sales price
Johnson Corporation has the following budgeted sales for the selected four-month period:
| Month | Unit Sales |
| July | 20,000 |
| August | 35,000 |
| September | 25,000 |
| October | 30,000 |
|
| Sales price per unit is $180 |
|
| Plans are to have an inventory of finished product equal to 20 percent of the unit sales for the next month. There was 4,000 units in beginning inventory on July 1st. |
|
| Three pounds of materials are required for each unit produced. Each pound of material costs $20. Inventory levels for materials equal 30 percent of the needs for the next month. |
|
| Desired ending inventory for September is 25,200 pounds of material. Beginning inventory for July was 20,700 pounds of material. |
Required:
| A. | Prepare a sales budget for July, August, and September and in total for the quarter. |
| B. | Prepare production budgets for July, August, and September and in total for the quarter. |
| C. | Prepare a direct materials purchases budget in pounds and dollars for July, August, and September and in total for the quarter. |
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DCAA Contract Audit Manual Volume 1
Authors: Defense Contract Audit Agency
1st Edition
B08HTL19V5, 979-8684992995
