Question
On January 1, 2023, the XYZ Company budget committee reached an agreement on the following data for the six months ending June 30, 2023: 1.
On January 1, 2023, the XYZ Company budget committee reached an agreement on the following data for the six months ending June 30, 2023:
1. | Sales units: First quarter 5,000; second quarter 5,700; third quarter 6,800 | ||
2. | Ending raw materials inventory: 40% of the next quarter's production requirements | ||
3. | Ending finished goods inventory: 25% of the next quarter's expected sales units | ||
4. | Third-quarter production: 6,900 units |
The ending raw materials and finished goods inventories on December 31, 2022, had the same percentages for production and sales that are budgeted for 2022. 3 kilograms of raw materials are needed to make each unit of finished goods. Raw materials purchased are expected to cost $4 per kilogram.
Prepare a production budget by quarters for the six-month period ending June 30, 2023. And Prepare a direct materials budget by quarters for the six-month period ending June 30, 2023.
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