Asked by Lindani Skhosana on May 10, 2024
Verified
Butler Manufacturing manufactures two products (1) Regular and (2) Deluxe. The budgeted units to be produced are as follows: \quad \quad \quad \quad \quad \quad Units of Product \text { Units of Product } Units of Product
2016 Regular Deluxe Total July 10,00015,00025,000 August 6,00010,00016,000 September 9,00014,00023,000 October 8,00012,00020,000\begin{array}{lr}2016 & \text { Regular }& \text { Deluxe } &\text { Total }\\\text { July } & 10,000&15,000&25,000 \\\text { August } & 6,000 &10,000&16,000\\\text { September } & 9,000&14,000&23,000 \\\text { October } & 8,000&12,000&20,000\end{array}2016 July August September October Regular 10,0006,0009,0008,000 Deluxe 15,00010,00014,00012,000 Total 25,00016,00023,00020,000 It takes 2 pounds of direct materials to produce the Regular product and 5 pounds of direct materials to produce the Deluxe product. It is the company's policy to maintain an inventory of direct materials on hand at the end of each month equal to 30% of the next month's production needs for the Regular product and 20% of the next month's production needs for the Deluxe product. Direct materials inventory on hand at June 30 were 6000 pounds for the Regular product and 15000 pounds for the Deluxe product. The cost per pound of materials is $5 Regular and $8 Deluxe.
Instructions
Prepare separate direct materials budgets for each product for the third quarter of 2016.
Direct Materials Budget
A financial plan that estimates the raw materials necessary for production, considering planned inventory levels and production requirements.
Deluxe Product
A high-quality or superior product that is more expensive than other options in the market.
Regular Product
A standard or common product offered by a company that is routinely manufactured or provided.
- Work out the indispensable acquisitions and expenses for direct materials, products, and ancillary budget features as per the given details.
- Organize financial frameworks for sales, production processes, and the acquisition of direct materials, guided by sales predictions and the firm's policies.
Verified Answer
Learning Objectives
- Work out the indispensable acquisitions and expenses for direct materials, products, and ancillary budget features as per the given details.
- Organize financial frameworks for sales, production processes, and the acquisition of direct materials, guided by sales predictions and the firm's policies.
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