Faye Co. manufactures a product using 3 kg of raw materials. Production and inventory budgets for June 2016 are as follows: Opening Inventories Closing Inventories Raw materials 11,000 kg 12,400 kg Finished goods 15,150 units 11,400 units Budgeted sales for June amounted to 18,000 units. During the production process, it is usually found that 5% of production units are scrapped as defective and this loss occurs after the raw materials have been placed in process. Required: 2. Assume that the cost of a kilogram of raw material is P16 and that 60% of purchases is paid in the month of purchase while the remaining in the month after the purchase, how much is the cash payment for the June? RS

Faye Co. manufactures a product using 3 kg of raw materials. Production and inventory budgets for June 2016 are as follows: Opening Inventories Closing Inventories Raw materials 11,000 kg 12,400 kg Finished goods 15,150 units 11,400 units Budgeted sales for June amounted to 18,000 units. During the production process, it is usually found that 5% of production units are scrapped as defective and this loss occurs after the raw materials have been placed in process. Required: 2. Assume that the cost of a kilogram of raw material is P16 and that 60% of purchases is paid in the month of purchase while the remaining in the month after the purchase, how much is the cash payment for the June? RS

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 37BEB: Preparing a Direct Materials Purchases Budget Tulum Inc. makes a Mexican chocolate mix sold in...

See similar textbooks

Similar questions

Prepare a cost of goods sold budget for MacLaren Manufacturing Inc. for the year ended December 31, 2016, from the following estimates. Inventories of production units: Direct materials purchased during the year, 548,000; beginning inventory of direct materials, 36,000; and ending inventory of direct materials, 23,000. Totals from other budgets included:
Budget performance report for a cost center Sneed Industries Company sells vehicle parts to manufacturers of heavy construction equipment. The Crane Division is organized as a cost center. The budget for the Crane Division for the month ended August 31, 20Y6, is as follows (in thousands): During August, the costs incurred in the Crane Division were as follows: Instructions For which costs might the director be expected to request supplemental reports?
Preparing a Direct Materials Purchases Budget Tulum Inc. makes a Mexican chocolate mix sold in 4-pound boxes. Planned production in units for the first 3 months of the coming year is: Each box requires 4.2 pounds of chocolate mix and one box. Company policy requires that ending inventories of raw materials for each month be 10% of the next months production needs. That policy was met for the ending inventory of December in the prior year. The cost of 1 pound of chocolate mix is 1.50. The cost of one box is 0.10. (Note: Round all unit amounts to the nearest unit. Round all dollar amounts to the nearest dollar.) Required: 1. Calculate the ending inventory of chocolate mix in pounds for December of the prior year and for January and February. What is the beginning inventory of chocolate mix for January? 2. Prepare a direct materials purchases budget for chocolate mix for the months of January and February. 3. Calculate the ending inventory of boxes for December of the prior year and for January and February. 4. Prepare a direct materials purchases budget for boxes for the months of January and February.
A company estimated the following raw materials purchases for the coming three months. Months April May June Amount $620,000 $640,000 $660,000 The company pays for the 30% raw materials purchases in the month of purchases while the remaining 70% of the raw materials purchases are paid for in the following month. What is the amount of accounts payable as on June 302 a. $448,000 b. $198,000 c. $462,000 d. $434,000
Question #12 At the end of November 2016, Caribbean Productions Ltd had 700 units of product BMR400 in store. For the month of December 2016, the company budgeted to produce 10,000 units of the product at a selling price of $2,500 each. Fixed administration and selling expenses were expected to be $1,500,000 and $1,000,000 respectively. During the month, the company produced 10,500 units of the product. On December 31, 2016, there were 1,100 units of the product on hand. The following cost information relating to the product was made available at the end of December 2016: Cost per unit Details $ Direct material 400 Direct labour 500 Variable production overheads 300 1,200 Fixed production overheads 150 Total 1,350 Required: Explain to management the circumstance that would have to prevail for both methods to produce the same profit figures. Reconcile the profits obtained from both product costing…
7-33 Purchases BudgetGreen Lighting Supply plans inventory levels (at cost) at the end of each month as follows: May, $271,000; June, $226,000; July, $209,000; and August, $241,000. Sales are expected to be June, $449,000; July, $359,000; and August, $306,000. Cost of goods sold is 65% of sales. Purchases in April were $258,000 and in May they were $188,000. Payments for each month’s purchases are made as follows: 15% during that month, 70% the next month, and the final 15% the next month. Prepare budget schedules for June, July, and August for purchases and for disbursements for purchases.
beginning Ending Raw materials inventory $12,000 $ 8,000 Work-in-process inventory 45,000 55,000 Finished goods inventory 9,000 11,000 Raw materials purchased $45,000 Direct labor costs 80,000 Overhead costs 30,000 Selling and administrative costs 20,000 McClintock Manufacturing Inc. has the above information available for the month of July: Question: How much is the Cost of Goods Manufactured for July?[19:18, 30/03/2023] Ornella Oc: 25[19:19, 30/03/2023] Ornella Oc: Angelo's is a locally run and operated pizza parlor. Last month, the restaurant broke-even when 400 pizzas were served. The average variable costs per pizza are $2.50 and fixed costs for the month totaled $6,000. What is the average selling price of a pizza? a.$6.00 b.$12.50 c.$17.50 d.$15.00
11. Schultz Company expects to manufacture and sell 30,000 baskets in a 20x4 for $6 each. There are 3,000 baskets in the beginning finished goods inventory with target ending inventory of 4,0000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 20 x 4 budgeted income statement? a. $174,000 b. $186,000 c. $180,000 d. $204,000
Each finished unit of merchandise Tecron contains 1.25 cm of Compound T. Budgeted sales of merchandise Tecron in the period is 25,000 units. Budgeted data for the month of December are as follows: 1st December Finished goods 2,300 units31st December Finished goods 2,000 unitsOpening inventory of raw materials 12,800 cmClosing inventory of raw material 9,000 cm What was the purchase of Compund T? Show solution
Required information Skip to question [The following information applies to the questions displayed below.]Shadee Corp. expects to sell 650 sun visors in May and 420 in June. Each visor sells for $17. Shadee’s beginning and ending finished goods inventories for May are 85 and 55 units, respectively. Ending finished goods inventory for June will be 55 units. Suppose that each visor takes 0.50 direct labor hours to produce and Shadee pays its workers $7 per hour.Required:Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)
Rooney, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget for April, May, June, and July. April May June July Budgeted cost of goods sold $69,000 $79,000 $89,000 $95,000 Rooney had a beginning inventory balance of $3,900 on April 1 and a beginning balance in accounts payable of $14,800. The company desires to maintain an ending inventory balance equal to 15 percent of the next period’s cost of goods sold. Rooney makes all purchases on account. The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the month following purchase. Required Prepare an inventory purchases budget for April, May, and June. Determine the amount of ending inventory Rooney will report on the end-of-quarter pro forma balance sheet. Prepare a schedule of cash payments for inventory for April, May, and June. Determine the balance in accounts payable Rooney will report on the…
J Co makes a component M which uses 3 kg of raw material X. The opening inventory at the start of next year is expected to be as follows. Opening inventory of raw material X 5,000 kg @ $4 Opening inventory of component M 2,000 units Sales of component M for the year are budgeted at 48,000 units. Production and sales are budgeted to occur evenly throughout the year. Closing inventory at the end of the year is budgeted as follows. Closing inventory of raw material X One month's worth of production Closing inventory of component M Two months' worth of sales (b) How many kg of material X are required for production in the year?