Question
Lock Tight, Inc., produces outside doors for installation on homes. The following information was gathered to prepare budgets for the upcoming year beginning January 1.
Lock Tight, Inc., produces outside doors for installation on homes. The following information was gathered to prepare budgets for the upcoming year beginning January 1.
Sales forecast in units | 6,500 | doors | |
Finished goods inventory, January 1 | 720 | doors | |
Target finished goods inventory, December 31 | 680 | doors | |
Raw materials inventorysteel, January 1 | 40,000 | pounds | |
Target inventorysteel, December 31 | 80,000 | pounds | |
Raw materials inventoryglass, January 1 | 6,000 | square feet | |
Target inventoryglass, December 31 | 4,000 | square feet | |
Budgeted purchase pricesteel | $ | 4 | per pound |
Budgeted purchase priceglass | $ | 2 | per square foot |
The manufacture of each door requires 20 pounds of steel and 6 square feet of glass.
a.Prepare the production schedule in units for Lock Tight.
b.Using the production schedule, develop the direct materials purchase budgets for steel and glass.
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