A. Amber, owner of Amber's Flowers and Gifts, produces gift baskets for various special occasions. Each gift basket includes fruit or assorted small gifts (e.g., a coffee mug, deck of cards, novelty cocoa mixes, scented soap) in a basket that is wrapped in colorful cellophane. Amber has estimated the following unit sales of the standard gift basket for the rest of the year and for January of next year. September October 260 250 November 270 December 350 January 170 Amber likes to have 5% of the next month's sales needs on hand at the end of each month. This requirement was met on August 31. Two materials are needed for each fruit basket: |2 pounds Fruit Small Gifts 4 items The materials inventory policy is to have 5% of the next month's fruit needs on hand and 30% of the next month's production needs of small gifts. (The relatively low inventory amo unt for fruit is designed to prevent spoilage.) Materials inventory on August 31 met this company policy. 1. Prepare a production bud get for September, October, November, and December for gift baskets. 2. Prepare a direct materials purchases budget for the two types of materials used in the production of gift baskets for the months of September, October, and November.
A. Amber, owner of Amber's Flowers and Gifts, produces gift baskets for various special occasions. Each gift basket includes fruit or assorted small gifts (e.g., a coffee mug, deck of cards, novelty cocoa mixes, scented soap) in a basket that is wrapped in colorful cellophane. Amber has estimated the following unit sales of the standard gift basket for the rest of the year and for January of next year. September October 260 250 November 270 December 350 January 170 Amber likes to have 5% of the next month's sales needs on hand at the end of each month. This requirement was met on August 31. Two materials are needed for each fruit basket: |2 pounds Fruit Small Gifts 4 items The materials inventory policy is to have 5% of the next month's fruit needs on hand and 30% of the next month's production needs of small gifts. (The relatively low inventory amo unt for fruit is designed to prevent spoilage.) Materials inventory on August 31 met this company policy. 1. Prepare a production bud get for September, October, November, and December for gift baskets. 2. Prepare a direct materials purchases budget for the two types of materials used in the production of gift baskets for the months of September, October, and November.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 19E: Tiger Drug Store carries a variety of health and beauty aids, including 500-count bottles of...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 4 images
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:
9781133935940
Author:
Ulric J. Gelinas
Publisher:
CENGAGE L
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:
9781133935940
Author:
Ulric J. Gelinas
Publisher:
CENGAGE L
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College