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Problem 9-14 Production and Direct Materials Purchases Budgets [LO2] Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular
Problem 9-14 Production and Direct Materials Purchases Budgets [LO2] Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 16,200 units plus 10% of the next month's sales. The finished goods inventory on March 31 is budgeted to be 28,200 units. b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 97,800 components. c. The company maintains no work in process inventories. A sales budget for the All Weather speaker is as follows: April May June July August Budgeted Sales in Units 117,000 151,000 208,000 119,000 60,700
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