Crest Products expects the following sales of its single product: Units September October November December January Required: Crest has an ending finished goods Inventory policy of 30% of the next month's sales needs. September 1 Inventory is projected to be 5,700 units Each finished unit requires 2 units of Component X and 3 units of Component Z August 1 materials inventory includes 4,000 units of Component X and 156,000 units of Component Z. Crest desires to maintain a Component X Inventory equal to 10% of next month's production needs and a Component Z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31 20,300 23,000 15,100 20,800 26,300 Crest Products Production Budget For the Quarter Ending December 31 October November Budgeted unit sales Plus Ending finished goods inventory Less Beginning finished goods inventory Budgeted production (units) December Total

Crest Products expects the following sales of its single product: Units September October November December January Required: Crest has an ending finished goods Inventory policy of 30% of the next month's sales needs. September 1 Inventory is projected to be 5,700 units Each finished unit requires 2 units of Component X and 3 units of Component Z August 1 materials inventory includes 4,000 units of Component X and 156,000 units of Component Z. Crest desires to maintain a Component X Inventory equal to 10% of next month's production needs and a Component Z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31 20,300 23,000 15,100 20,800 26,300 Crest Products Production Budget For the Quarter Ending December 31 October November Budgeted unit sales Plus Ending finished goods inventory Less Beginning finished goods inventory Budgeted production (units) December Total

Name: B7 Crest Products expects the following sales of its single product:Se
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Description: B7 Crest Products expects the following sales of its single product:SeptemberOctoberUnits20,30023,000NovemberDecemberJanuaryRequired:Crest has an ending finished goods Inventory policy of 30% of the next month's sales needs. September 1 Inventory is

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 3CE: Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month...

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Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
One Device makes universal remote controls and expects to sell 500 units in January, 800 in February, 450 in March, 550 in April, and 600 in May. The required ending inventory is 20% of the next months sales. Prepare a production budget for the first four months of the year.
Total Pops data show the following information: New machinery will be added in April. This machine will reduce the labor required per unit and increase the labor rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next months requirements. Direct material requires 2 pounds per unit at a cost of $3 per pound. The ending inventory required for direct materials is 15% of the next months needs. In January, the beginning inventory is 3,000 units of finished goods and 4,470 pounds of material. Prepare a production budget, direct materials budget, and direct labor budget for the first quarter of the year.
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottiss current inventory policy. Is this the minimum cost? Why or why not?
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