Question
White Corporation's budget calls for the following sales for next year: Quarter 1 96,500 units Quarter 2 82,000 units Quarter 3 67,700 units Quarter 4
White Corporation's budget calls for the following sales for next year:
Quarter 1 96,500 units Quarter 2 82,000 units Quarter 3 67,700 units Quarter 4 98,800
Each unit of the product requires 3 pounds of direct materials. The company's policy is to begin each quarter with an inventory of product equal to 5% of that quater's estimated sales requirements and an inventory of direct materials equal to 20% of that quarter's estimated direct materials requirements for production.
1. Determine the production budget for the second quarter:
Budgeted sales_____________
Desired ending inventory________________
Total units needed ___________________
Beginning inventory ____________________
Total units to produce__________________
2. Determine the materials purchases budget for the second quater:
Budgeted production _________________
Direct materials (lbs.) per unit produced ____________________
Direct materials needed in production
Desired ending inventory of direct materials (lbs.)_____________
Total direct materials needed ________________________
Beginning inventory of direct materials ___________________
Budgeted purchases of direct materials (lbs.) _______________
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