Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

  1. Prepare a production budget in units for October, November, and December.
  2. 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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Peter Howells, Keith Bain

5th Edition

0273709194, 9780273709190

More Books

Students also viewed these Accounting questions

Question

Define job pricing. What is the purpose of job pricing?

Answered: 1 week ago

Question

What are some companywide pay plans? Briefly discuss each.

Answered: 1 week ago