Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Use the attached Excel spreadsheet to determine the raw materials purchases budget for the year. Data Year 2 Quarter Year 3 Quarter 1 2 3
Use the attached Excel spreadsheet to determine the raw materials purchases budget for the year.
| Data | Year 2 Quarter | Year 3 Quarter | |||||
| 1 | 2 | 3 | 4 | 1 | 2 | ||
| Budgeted unit sales | 40,000 | 60,000 | 100,000 | 50,000 | 70,000 | 80,000 | |
| Selling price per unit | $8 | ||||||
| Desired ending finished goods inventory is | 30% | of the budgeted unit sales of the next quarter | |||||
| Finished goods inventory, beginning | 12,000 | units | |||||
| Raw materials required to produce one unit | 5 | pounds | |||||
| Desired ending inventory of raw materials is | 10% | of the next quarter's production needs | |||||
| Raw materials inventory, beginning | 23,000 | pounds | |||||
| Raw material costs | $0.80 | per pound | |||||
| Construct the sales budget | Year 2 Quarter | Year 3 Quarter | |||||
| 1 | 2 | 3 | 4 | 1 | 2 | ||
| Budgeted unit sales | 40,000 | 60,000 | 100,000 | 50,000 | 70,000 | 80,000 | |
| Selling price per unit | $8 | $8 | $8 | $8 | $8 | $8 | |
| Total sales | $320,000 | $480,000 | $800,000 | $400,000 | $560,000 | $640,000 | |
| Construct the production budget | Year 2 Quarter | Year 3 Quarter | |||||
| 1 | 2 | 3 | 4 | Year | 1 | 2 | |
| Budgeted unit sales | 40,000 | 60,000 | 100,000 | 50,000 | 250,000 | 70,000 | 80,000 |
| Add desired ending finished goods inventory | 18,000 | 30,000 | 15,000 | 21,000 | 21,000 | 24,000 | |
| Total needs | 58,000 | 90,000 | 115,000 | 71,000 | 271,000 | 94,000 | |
| Less beginning finished goods inventory | (12,000) | (18,000) | (30,000) | (15,000) | (12,000) | (21,000) | |
| Required production in units | 46,000 | 72,000 | 85,000 | 56,000 | 259,000 | 73,000 | |
| Construct the raw materials purchases budget | Year 2 Quarter | Year 3 Quarter | |||||
| 1 | 2 | 3 | 4 | Year | 1 | ||
| Required production (units) | ? | ? | ? | ? | ? | ? | |
| Raw materials required to produce one unit (pounds) | ? | ? | ? | ? | ? | ? | |
| Production needs (pounds) | ? | ? | ? | ? | ? | ? | |
| Add desired ending inventory of raw materials (pounds) | ? | ? | ? | ? | ? | ||
| Total needs (pounds) | ? | ? | ? | ? | ? | ||
| Less beginning inventory of raw materials (pounds) | ? | ? | ? | ? | ? | ||
| Raw materials to be purchased (pounds) | ? | ? | ? | ? | ? | ||
| Cost of raw materials per pound | ? | ? | ? | ? | ? | ||
| Cost of raw materials to be purchased | ? | ? | ? | ? | ? | ||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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