The Pickachip Company produces and sells organic plain potato chips. The onepound family size bag of...

Transcribed Image Text:

The Pickachip Company produces and sells organic plain potato chips. The onepound family size bag of chips has two direct materials - potatoes and packaging. Pickachip is preparing budgets for the second quarter ending June 30, 2022. For each requirement below prepare budgets by month for April, May, and June, and a total budget for the quarter. 1. The previous year's sales (2021) for the corresponding period were: April May 85,000 bags 90,000 bags June 100,000 bags July August 95,000 bags 100,000 bags The company expects the above volume of sales to increase by 10% for the period April 2022 - August 2022. The budgeted selling price for 2022 is $11.50 per bag of chips. The company expects 10% of its sales to be cash (COD) sales. The remaining 90% of sales will be made on credit. Prepare a Sales Budget for Pickachip. 2. The company desires to have finished goods inventory on hand at the end of each month equal to 11 percent of the following month's budgeted unit sales. On March 31, 2022, Pickachip expects to have 10,285 bags of chips on hand. Prepare a Production budget. 3. The final product (bags of chips) requires two direct materials: potatoes and packaging. Potatoes 4 pounds of raw potatoes are required for each one-pound bag of potato chips. Management desires to have materials on hand (i.e., pounds of potatoes) at the end of each month equal to 20 percent of the following month's production needs. The beginning materials inventory, April 2022, is expected to be 75,284 pounds. Potatoes cost $1.20 per pound. Packaging Packaging material is purchased by the roll and 50 bags of chips are produced from each roll. The packaging is made from biodegradable, organic plant fiber that extends the shelf life of the potato chips while preserving its freshness. Management desires The Pickachip Company produces and sells organic plain potato chips. The onepound family size bag of chips has two direct materials - potatoes and packaging. Pickachip is preparing budgets for the second quarter ending June 30, 2022. For each requirement below prepare budgets by month for April, May, and June, and a total budget for the quarter. 1. The previous year's sales (2021) for the corresponding period were: April May 85,000 bags 90,000 bags June 100,000 bags July August 95,000 bags 100,000 bags The company expects the above volume of sales to increase by 10% for the period April 2022 - August 2022. The budgeted selling price for 2022 is $11.50 per bag of chips. The company expects 10% of its sales to be cash (COD) sales. The remaining 90% of sales will be made on credit. Prepare a Sales Budget for Pickachip. 2. The company desires to have finished goods inventory on hand at the end of each month equal to 11 percent of the following month's budgeted unit sales. On March 31, 2022, Pickachip expects to have 10,285 bags of chips on hand. Prepare a Production budget. 3. The final product (bags of chips) requires two direct materials: potatoes and packaging. Potatoes 4 pounds of raw potatoes are required for each one-pound bag of potato chips. Management desires to have materials on hand (i.e., pounds of potatoes) at the end of each month equal to 20 percent of the following month's production needs. The beginning materials inventory, April 2022, is expected to be 75,284 pounds. Potatoes cost $1.20 per pound. Packaging Packaging material is purchased by the roll and 50 bags of chips are produced from each roll. The packaging is made from biodegradable, organic plant fiber that extends the shelf life of the potato chips while preserving its freshness. Management desires