Lock Tight, Inc., produces outside doors for installation on homes. The following information was gathered to prepare budgets for the upcoming year beginning January 1. Sales forecast in units 6,500 doors Finished goods inventory, January 1 720 doors 680 doors Target finished goods inventory, December 31 Raw materials inventory-steel, January 1 40,000 pounds 80,000 pounds Target inventory-steel, December 31 Raw materials inventory-glass, January 1 6,000 square feet 4,000 square feet Target inventory-glass, December 31 $4 per pound Budgeted purchase price-steel Budgeted purchase price-glass. $2 per square foot The manufacture of each door requires 20 pounds of steel and 6 square feet of glass. Prepare the production schedule in units for Lock Tight. b. Using the production schedule, develop the direct materials purchase budgets for steel and glass. c. Why might Lock Tight's target level of steel inventory be higher than last year's ending bal- ance and its target level of glass inventory be lower than last year's ending balance? a.

Lock Tight, Inc., produces outside doors for installation on homes. The following information was gathered to prepare budgets for the upcoming year beginning January 1. Sales forecast in units 6,500 doors Finished goods inventory, January 1 720 doors 680 doors Target finished goods inventory, December 31 Raw materials inventory-steel, January 1 40,000 pounds 80,000 pounds Target inventory-steel, December 31 Raw materials inventory-glass, January 1 6,000 square feet 4,000 square feet Target inventory-glass, December 31 $4 per pound Budgeted purchase price-steel Budgeted purchase price-glass. $2 per square foot The manufacture of each door requires 20 pounds of steel and 6 square feet of glass. Prepare the production schedule in units for Lock Tight. b. Using the production schedule, develop the direct materials purchase budgets for steel and glass. c. Why might Lock Tight's target level of steel inventory be higher than last year's ending bal- ance and its target level of glass inventory be lower than last year's ending balance? a.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 3PA: Budgeted income statement and supporting budgets The budget director of Birding Homes Feeders Inc.,...

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