Question
Please show calculations! Simpson Corporation is developing a revised budget for the 4th quarter of 2024. For fiscal year 2024, below is the company's estimates
Please show calculations!
Simpson Corporation is developing a revised budget for the 4th quarter of 2024.
For fiscal year 2024, below is the company's estimates of 4t quarter 2024 unit sales:
Month | Unit Sales |
October | 80,000 |
November | 140,000 |
December | 100,000 |
Additionally, projected January 2025 sales are estimated at 120,000 units.
Assume that the company estimates 38,000 units of finished goods in inventory at the beginning of October and the company wants to maintain ending monthly finished goods inventory equal to 25% of the following month's unit sales.
Five pounds of raw materials are required for each unit produced. Raw materials cost $10 per pound.
Plans are to have inventory levels for raw materials equal to 30% of materials needed to satisfy next month's production.
Lastly, assume that
Raw materials inventory on October 1 will equal 120,000 pounds.
- Raw materials inventory should be 168,000 units at the end of December.
Required
- Prepare a production budget in units for October, November, and December.
- Prepare a raw material purchases budget in pounds and in dollars for October, November, and December.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started