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.

Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKicks policy is that 20 percent of the following months production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement. Required: 1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year. 2. What if FlashKick decreased the ending inventory percentage to 15 percent of the next months production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1? Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget?

Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in 5-gallon drums. Planned production in units for the first 3 months of the coming year is: Each drum requires 5.5 gallons of chemicals and one plastic drum. Company policy requires that ending inventories of raw materials for each month be 15% of the next months production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is 2.00. The cost of one drum is 1.60. (Note: Round all unit amounts to the nearest unit. Round all dollar amounts to the nearest dollar.) Required: 1. Calculate the ending inventory of chemicals in gallons for December of the prior year and for January and February. What is the beginning inventory of chemicals for January? 2. Prepare a direct materials purchases budget for chemicals for the months of January and February. 3. Calculate the ending inventory of drums for December of the prior year and for January and February. 4. Prepare a direct materials purchases budget for drums for the months of January and February.

PROBLEM 02: Production and Direct material Budget Tonga Toys manufactures and distributes a number of products to retailers. One of these products, Playclay, requires three pounds of material A135 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter-July, August, and September. Peak sales of Playclay occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 5,000 units plus 30% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 17,000 units. b. The raw materials inventory on hand at the end of each month must be equal to one-half of the following month's production needs for raw materials. The raw materials inventory on June 30 for material A135 is budgeted to be 64,500 pounds. August September 50,000 Particulars November December July…

f2 Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.70 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. f3 First 92,000 Budgeted production, in bottles. The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 73,600 grams of musk oil will be on hand to start the first quarter of Year 2. f4 fs Second 122,000 First Mink Caress Direct Materials Budget - Year 2 f6 Year 2 Q Search 4- Third 182,000 Second f7…

PROBLEM 7-B PRODUCTION BUDGET The TESS Company has budgeted sales for the year as follows: Quarter 3 14,000 Quarter 1 10,000 Quarter 2 12,000 Quarter 4 16,000 Sales in units The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 2,500 units. Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,200 pounds. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in material. Required: 1. How many units should be produced in the third quarter?

PROBLEM 7-I CASH BUDGET The Francine Company, a merchandising firm, has planned the following sales for the next four months: March April May June Total budgeted sales..... 50,000 70,000 90,000 60,000 Sales are made 40% for cash and 60% on account. From experience, the company has learned that a month's sales on account are collected according to the following pattern: Month of sale 70% First month following month of sale 20% Second month following month of sale 8% Uncollectible 2% The company requires a minimum cash balance of $4,000 to start a month. Required: A. Compute the budgeted cash receipts for June. B. Assume the following budgeted data for June: Purchases... P52,000 Selling and administrative expenses. 10,000 Depreciation 8,000 Equipment purchases. 15,000 Cash balance, beginning of June 6,000 Using this data, along with your answer to part (1) above, prepare a cash budget in good form for June. Clearly show any borrowing needed during the month. The company can borrow in any…

PROBLEM 7-B PRODUCTION BUDGET The TESS Company has budgeted sales for the year as follows: Quarter 3 14,000 Quarter 1 10,000 Quarter 2 12,000 Quarter 4 16,000 Sales in units The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 2,500 units. Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,200 pounds. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in material. Required: 1. How many units should be produced in the third quarter? 2. How many pounds of materials should be purchased for the second quarter?

PROBLEM 7-I CASH BUDGET The Francine Company, a merchandising firm, has planned the following sales for the next four months: March April May June Total budgeted sales... 50,000 70,000 90,000 60,000 Sales are made 40% for cash and 60% on account. From experience, the company has learned that a month's sales on account are collected according to the following pattern: Month of sale 70% First month following month of sale 20% Second month following month of sale 8% Uncollectible 2% The company requires a minimum cash balance of $4,000 to start a month. Required: B. Assume the following budgeted data for June: Purchases Р52,000 Selling and administrative expenses..... 10,000 Depreciation ..... 8,000 Equipment purchases... 15,000 Cash balance, beginning of June.. 6,000 Using this data, along with your answer to part (1) above, prepare a cash budget in good form for June. Clearly show any borrowing needed during the month. The company can borrow in any dollar amount, but will not pay any…