Production Budget and Purchase of Raw Materials. BrownCorporation's sales budget for the following year is as follows:Quarter 1 = 20,000 units%3DQuarter 2 = 25,000 unitsQuarter 3 = 22,000 units%3DQuarter 4 = 30,000 unitsEach unit of product requires 2 pounds of direct materials. Thecompany's policy is that at the beginning of each quarter, productinventory is 15 percent of sales for the quarter and direct materialinventory is equal to 25 percent of diréct material needs forproduction in that quarter.Required: Determine the production and purchase budget of rawmaterials for the second quarter!

Production budget is the estimate of units to be produced in a future period.

Answered: Production Budget and Purchase of Raw…

Business

Accounting

Production Budget and Purchase of Raw Materials Cornerotion

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 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...

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Palmgren Company produces consumer products. The sales budget for four months of the year is presented below. Company policy requires that ending inventories for each month be 25 percent of next months sales. At the beginning of July, the beginning inventory of consumer products met that policy. Required: Prepare a production budget for the third quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total.