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22.05.2020 •
Business
Marigold Company’s sales budget projects unit sales of part 198Z of 10,300 units in January, 12,000 units in February, and 13,500 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $4 per pound. Marigold Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 20% of the next month’s expected unit sales. These goals were met on December 31, 2016.
a. Prepare a projected budget for Jan and Feb 2017
b. Prepare a direct material budget for Jan 2017
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Ответ:
Production Budget Jan 10,640 Feb 12,300
Direct Materials Budget Jan 45216
Explanation:
Production Budget = Sales + Desired Ending Inventory - Opening Inventory
The ending inventory for one month is the opening inventory for the next. We calculate the ending inventory for
Jan= 20% 0f 12000 units= 2400
Feb = 20% of 13500 units= 2700
Marigold Company
Production Budget
Jan Feb March
Sales Units 10,300 12000 13500
Add Desired
Ending Inventory 2400 2700
Less Opening 2060 2400 2700
Production Budget 10,640 12,300
Direct Materials Budget = Production Budget in pounds + Direct Materials Desired Ending Inventory - Opening Inventory Direct Materials
The ending inventory for one month is the opening inventory for the next. We calculate the ending inventory for
Jan= 40% 0f 49,200 units= 19680
Dec = 40% 0f 42,560 units= 17024
Dec Ending Inv= Jan opening Inventory
Marigold Company
Direct Materials Budget
Jan Feb
Production Units 10,640 12300
Pounds per unit 4 4
Production pounds 42,560 49,200
Add Desired
Ending Inventory 19,680
Less Opening 17024 19680
Direct Materials Budget 45216
Ответ:
Hi There the correct answer is D. Mock-up
Hope it helps!