Log in
Accounting
1
answer
0
watching
501
views

DeWitt Industries has adopted the following production budgetfor the first 4 months of 2017.

Month

Units

Month

Units
January 10,240 March 5,150
February 8,340 April 4,130


Each unit requires 3 pounds of raw materials costing $2 per pound.On December 31, 2016, the ending raw materials inventory was 6,144pounds. Management wants to have a raw materials inventory at theend of the month equal to 20% of next month’s productionrequirements.

Prepare a direct materials purchases budget by month for the firstquarter.

Watch
1
answer
0
watching
501
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Trinidad Tremblay
Trinidad TremblayLv2
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related questions

Junker Corp. budgets its monthly production of doohickeys for the first four months of the year asfollows: January 32,500 units;February 38,500 units; March 39,750 units; April 38,750 units.

Eachdoohickey requires 5 pounds of gunk. Gunk costs $0.50/pound.

Thecompany’s policy is ending inventory of raw materials each month must be 20% of the following month’s productionneeds.

Prepare amaterials purchase budget for the Jan-Mar quarter in pounds of gunk and $.

Colosimo Company started business on January 1, 2017. Thecompany estimated that sales for the first six months would be asfollows:

January - 10,000 units, $60,000

February - 8,000 units, $48,000

March - 15,000 units, $90,000

April - 17,000 units, $102,000

May - 22,000 units, $132,000

June - 30,000 units, $180,000

The company sells all items on account and expects collectionsof accounts receivable to be as follows: 65% in the month of thesale, and the remaining 35% in the month after the sale.

Required:

(a) Compute the expected cash collections during the months ofJanuary, February, March, April, May and June.

(b) The company has decided that finished goods inventory at theend of each month should ideally be equal to 45% of next month’ssales. What should budgeted production be for each month?

(c) It takes three pounds of raw material to make one unit offinished product. The company wants to keep an ending inventory ofraw material equal to 40% of next month’s production needs. Howmany pounds of raw material should be purchased in each month?

(d) The raw material costs $2.75 per pound. The company pays for75% of its purchases during the month of purchase and the remainderin the following month. How much cash will be disbursed during eachmonth for the purchase of raw material?

(e) The projected cash balance on March 1 is $19,500. What isthe estimated cash balance at the end of the month? (Prepare aformal cash budget for the month of March.)

Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations:
a.

The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and September are 9,000, 21,000, 23,000, and 24,000 units, respectively. All sales are on credit.
b.

Thirty percent of credit sales are collected in the month of the sale and 70% in the following month.
c. The ending finished goods inventory equals 30% of the following month’s unit sales.
d.

The ending raw materials inventory equals 20% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.70 per pound.
e.

Twenty percent of raw materials purchases are paid for in the month of purchase and 80% in the following month.
f.

The direct labor wage rate is $14 per hour. Each unit of finished goods requires two direct labor-hours.
g.

The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $60,000.

1. If 116,500 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July? Raw materials to be purchased ________

2. What is the estimated cost of raw materials purchases for July? Cost of raw materials to be purchased ________

3. If the cost of raw material purchases in June is $194,400, what are the estimated cash disbursements for raw materials purchases in July? Expected cash disbursements __________

4. What is the estimated accounts payable balance at the end of July? Accounts payable _______

5. What is the estimated raw materials inventory balance (in dollars) at the end of July? Raw material inventory balance _________

6. What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced? Total estimated direct labor cost _______

THANK YOU SO VERY MUCH FOR YOUR SUPPORT!!!

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in