Homework SourseLa Turtle Company Manufactures and sells wax for cars The fo
La Turtle Company Manufactures and sells wax for cars. The following information is available concerning to operations for 2016 - the coming year and for the firsst two quarters of 2016.
a. The company\'s single product it sells for $8 per unit. Budgeted sales in units for the next six quarters are as follows:
2015:
Q1- 40,000, Q2-60,000 Q3-100,000 Q4-50,000
2016:
Q1-70,000, Q2- 80,000
B. The company requiers an ending inventory of finished units on hand at the end of each quarter equal to 30% of the budgeted sales for the next quarter. This requirement was met on December 31, 2014, in that the company had 12,000 unit on hand to start the new year.
C. Five pounds of raw materials are requierd to complete one unit of product. The company requires an ending inventory of raw materials on hand at the end of each quarter equal to 10% of the production needs of the following quarter. This requierment was met on December 31,2014 in that the company had 23,000 pounds of raw material on hand to start the new year. The raw material costs $0.80 per pound.
1. Prepare a sale budget for 2015
2. Prepare a production budget for 2015
3. Prepare a direct materials purchase budget for 2015
Show the schedule by quarter and a total quarter.
Solution
Solution:
1) Sales Budget for 2015
2015
Q1
Q2
Q3
Q4
Total
Budgeted Sales Unit
40,000
60,000
100,000
50,000
250,000
Sale Price Per Unit
$8
$8
$8
$8
$8
Budgeted Sales (US$)
$320,000
$480,000
$800,000
$400,000
$2,000,000
2) Production Budget for 2015
2015
Q1
Q2
Q3
Q4
Total
Budgeted Sales Unit
40,000
60,000
100,000
50,000
250,000
Add: Ending Inventory (30% of the budgeted sales for the next quarter)
18000
30000
15000
21000
84,000
Less: Beginning Inventory (Ending Inventory of last month)
(12000)
(18000)
(30000)
(15000)
(75000)
Budgeted Production Units
46,000
72,000
85,000
56,000
259,000
Working:
2015
2016
Q1
Q2
Q3
Q4
Q1
Q2
Budgeted Sales Unit
40,000
60,000
100,000
50,000
70,000
80,000
Add: Ending Inventory (30% of the budgeted sales for the next quarter)
18000
30000
15000
21000
24000
0
Less: Beginning Inventory (Ending Inventory of last month)
(12000)
(18000)
(30000)
(15000)
(21000)
(24000)
Budgeted Production Units
46,000
72,000
85,000
56,000
73,000
56,000
3) Direct Materials Purchase Budget 2015
2015
Q1
Q2
Q3
Q4
Total
Bedgeted Production Units
46,000
72,000
85,000
56,000
259,000
Direct Material Requirement in Pounds for Budgeted Production Units (5 Pounds for each Unit)
230000
360000
425000
280000
1295000
Add: Ending Inventory (10% of the production needs of the following quarter)
36000
42500
28000
36500
143000
Less: Beginning Inventory (Ending Inventory of last quarter)
(23000)
(36000)
(42500)
(28000)
(129500)
Budgeted Direct Material Purchase Requirement (in pounds)
243000
366500
410500
288500
1308500
Raw Material Cost per Pound
$0.80
$0.80
$0.80
$0.80
$0.80
Direct Material Purchase Budget (Required Units x Price per Pound)
$194,400
$293,200
$328,400
$230,800
$1,046,800
Working Note:
2015
2016
Q1
Q2
Q3
Q4
Total
Q1
Q2
Budgeted Production Units
46,000
72,000
85,000
56,000
259,000
73,000
56,000
Direct Material Requirement in Pounds for Budgeted Production Units (5 Pounds for each Unit)
230000
360000
425000
280000
1295000
365000
280000
Add: Ending Inventory (10% of the production needs of the following quarter)
36000
42500
28000
36500
143000
28000
Less: Beginning Inventory (Ending Inventory of last quarter)
(23000)
(36000)
(42500)
(28000)
(129500)
Budegeted Direct Material Purchase Requirement (in pounds)
243000
366500
410500
288500
1308500
Raw Material Cost per Pount
$0.80
$0.80
$0.80
$0.80
$0.80
Direct Material Purchase Budget (Required Units x Price per Pound)
$194,400
$293,200
$328,400
$230,800
$1,046,800
| 2015 | |||||
| Q1 | Q2 | Q3 | Q4 | Total | |
| Budgeted Sales Unit | 40,000 | 60,000 | 100,000 | 50,000 | 250,000 |
| Sale Price Per Unit | $8 | $8 | $8 | $8 | $8 |
| Budgeted Sales (US$) | $320,000 | $480,000 | $800,000 | $400,000 | $2,000,000 |
