Roose manufactures a product called Wye. The owners of Roose are preparing the budgets for the three months ending December 2020. Expected sales in units are shown below. October 2020 November 2020 December 2020 January 2021 Units of Wye 5,700 units 6,080 units 6,384 units 4,788 units One completed Wye contains 3.40 kg of material, costing RM 9.30 per kg. Inventory as at 1 Oct 2020 Inventory decision Finished product (units) of Wye 1,425 units Closing inventory in any month should represent 25% of the next month’s expected sales Material (kg) 25,000 kg This is to be reduced at a constant rate to 16, 000 kg by the end of December 2020 Required: Prepare for each of the months October to December 2020, the Production Budget for finished products Wye. Prepare, for each of the months October to December 2020, the Materials Purchases Budget.
Roose manufactures a product called Wye. The owners of Roose are preparing the budgets for the three months ending December 2020. Expected sales in units are shown below. October 2020 November 2020 December 2020 January 2021 Units of Wye 5,700 units 6,080 units 6,384 units 4,788 units One completed Wye contains 3.40 kg of material, costing RM 9.30 per kg. Inventory as at 1 Oct 2020 Inventory decision Finished product (units) of Wye 1,425 units Closing inventory in any month should represent 25% of the next month’s expected sales Material (kg) 25,000 kg This is to be reduced at a constant rate to 16, 000 kg by the end of December 2020 Required: Prepare for each of the months October to December 2020, the Production Budget for finished products Wye. Prepare, for each of the months October to December 2020, the Materials Purchases Budget.
Chapter7: Budgeting
Section: Chapter Questions
Problem 1PA: Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and...
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Roose manufactures a product called Wye. The owners of Roose are preparing the budgets for the three months ending December 2020. Expected sales in units are shown below.
|
|
October 2020 |
November 2020 |
December 2020 |
January 2021 |
|
Units of Wye |
5,700 units |
6,080 units |
6,384 units |
4,788 units |
One completed Wye contains 3.40 kg of material, costing RM 9.30 per kg.
|
|
Inventory as at 1 Oct 2020 |
Inventory decision |
|
Finished product (units) of Wye |
1,425 units |
Closing inventory in any month should represent 25% of the next month’s expected sales |
|
Material (kg) |
25,000 kg |
This is to be reduced at a constant rate to 16, 000 kg by the end of December 2020 |
Required:
- Prepare for each of the months October to December 2020, the Production Budget for finished products Wye.
- Prepare, for each of the months October to December 2020, the Materials Purchases Budget.
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