Question
On January 1, 2017, the Blue Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2017. Sales
On January 1, 2017, the Blue 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.
(a)
Prepare a production budget by quarters for the 6-month period ended June 30, 2017.
BLUE COMPANY Production Budget For the Six Months Ending June 30, 2017For the Quarter Ending June 30, 2017June 30, 2017 | ||||||
Quarter | ||||||
1 | 2 | Year | ||||
Beginning Finished Goods UnitTotal Required UnitsExpected Unit SalesDirect Materials PurchasesTotal Materials RequiredDirect Materials Per UnitBeginning Direct MaterialsRequired Production UnitsDesired Ending Finished Goods UnitDesired Ending Direct Materials | ||||||
AddLess: Desired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials PurchasesDirect Materials Per UnitBeginning Finished Goods UnitRequired Production UnitsTotal Materials RequiredBeginning Direct MaterialsTotal Required UnitsExpected Unit Sales | ||||||
Total Required UnitsRequired Production UnitsDesired Ending Direct MaterialsTotal Materials RequiredDirect Materials PurchasesDesired Ending Finished Goods UnitBeginning Direct MaterialsExpected Unit SalesDirect Materials Per UnitBeginning Finished Goods Unit | ||||||
AddLess: Required Production UnitsDesired Ending Finished Goods UnitTotal Materials RequiredBeginning Finished Goods UnitDirect Materials PurchasesDesired Ending Direct MaterialsTotal Required UnitsBeginning Direct MaterialsExpected Unit SalesDirect Materials Per Unit | ||||||
Direct Materials Per UnitDesired Ending Finished Goods UnitExpected Unit SalesTotal Required UnitsDirect Materials PurchasesTotal Materials RequiredBeginning Finished Goods UnitDesired Ending Direct MaterialsRequired Production UnitsBeginning Direct Materials |
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