Electro Company Electro Company budgets production of 670,000 electric panels in the second quarter and 740,000 electric panels in the third quarter.Each panel requires 0.80 pound of direct material at a cost of $2.00 per pound. The company desires to end each quarter with anending Inventory of this material equal to 20% of next quarter's budgeted materials requirements. Beginning Inventory of this materialIs 107,200 pounds.Prepare a direct materials budget for the second quarter.Units to produceELECTRO COMPANYDirect Materials BudgetMaterials needed for production (pounds)Total materials requiredMaterials to purchase (pounds)Cost of direct materials purchasesSecond Quarter670,000 units Electro Company manufactures transmissions for electric cars. Management reports ending finished goods Inventory for the firstquarter at 236,500 units. The following unit sales are budgeted during the rest of the year. second quarter, 473,000 units; thirdquarter, 219,000 units; and fourth quarter, 431,500 units. Company policy calls for the ending finished goods Inventory of a quarter toequal 50% of the next quarter's budgeted unit sales.Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture.ELECTRO COMPANYProduction BudgetBudgeted sales unitsAdd: Desired ending inventoryNext period budgeted sales unitsRatio of inventory to future salesDesired ending inventory unitsTotal required unitsLess: Beginning inventory unitsUnits to produceSecond Quarter473.00050%Third Quarter219,00050%

Introduction:- The direct materials budget indicates how much must be purchased of each raw material…

Prepare a direct materials budget for the second quarter. Units to produce ELECTRO COMPANY Direct Materials Budget Materials needed for production (pounds) Total materials required Materials to purchase (pounds) Second Quarter 670,000 units

Prepare a direct materials budget for the second quarter. Units to produce ELECTRO COMPANY Direct Materials Budget Materials needed for production (pounds) Total materials required Materials to purchase (pounds) Second Quarter 670,000 units

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 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...

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The sales department of Macro Manufacturing Co. has forecast sales for its single product to be 20,000 units for June, with three-quarters of the sales expected in the East region and one-fourth in the West region. The budgeted selling price is 25 per unit. The desired ending inventory on June 30 is 2,000 units, and the expected beginning inventory on June 1 is 3,000 units. Prepare the following: a. A sales budget for June. b. A production budget for June.
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