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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
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 5,100; second quarter 6,800; third quarter 7,300 | |
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: | 7,390 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 $5 per pound.
Prepare a production budget by quarters for the 6-month period ended June 30, 2017.
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