Question
In: Accounting
Patrick Inc. makes industrial solvents sold in 5-gallon drum containers. Planned production in units for the...
Patrick Inc. makes industrial solvents sold in 5-gallon drum containers. Planned production in units for the first 3 months of the coming year is:
| January | 40,000 |
| February | 50,000 |
| March | 65,000 |
Each drum requires 6 gallons of chemicals and one plastic drum container. Company policy requires that ending inventories of raw materials for each month be 20% of the next month's 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.
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? Round your answers to the nearest whole gallon.
| Ending inventory for December | gallons |
| Ending inventory for January | gallons |
| Ending inventory for February | gallons |
| Beginning inventory for January | gallons |
2. Prepare a direct materials purchases budget for chemicals for the months of January and February. Round Dollar purchases to the nearest dollar. Round all the other values to the nearest whole unit. Do not include a multiplication symbol as part of your answer.
| Patrick Inc. | ||
| Direct Materials Purchases Budget - Chemicals in Gallons | ||
| For the Months of January and February | ||
| January | February | |
| Production in units | ||
| Gallons per unit | ||
| Gallons for production | ||
| Desired ending inventory | ||
| Needed | ||
| Less: Beginning inventory | ||
| Purchases | ||
| Price per gallon | $ | $ |
| Dollar purchases | $ | $ |
3. Calculate the ending inventory of drums for December of the prior year, and for January and February. Round your answers to the nearest whole unit.
| Ending inventory for December | units |
| Ending inventory for January | units |
| Ending inventory for February | units |
4. Prepare a direct materials purchases budget for drums for the months of January and February. Round Dollar purchases to the nearest dollar. Round all the other values to the nearest whole unit. Do not include a multiplication symbol as part of your answer.
| Patrick Inc. | ||
| Direct Materials Purchases Budget - Drums | ||
| For the Months of January and February | ||
| January | February | |
| Production in units | ||
| Drums per unit | ||
| Drums for production | ||
| Desired ending inventory | ||
| Needed | ||
| Less: Beginning inventory | ||
| Purchases | ||
| Price per drum | $ | $ |
| Dollar purchases | $ | $ |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in five-gallon drums. Planned...
Preparing a Direct Materials Purchases Budget
Patrick Inc. makes industrial solvents sold in five-gallon
drums. Planned production in units for the first three months of
the coming year is:
January
40,000
February
50,000
March
65,000
Each drum requires 6 gallons of chemicals and one plastic drum.
Company policy requires that ending inventories of raw materials
for each month be 20% of the next month's production needs. That
policy was met for the ending inventory of December in the prior
year....
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Patrick Inc. makes industrial solvents. In the first 4 months of
the coming year, Patrick expects the following unit sales: January
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is to have 25% of next month's sales in ending inventory. On
January 1, it is expected that there will be 6,700 drums of solvent
on hand. Required: Prepare a production budget for the first
quarter of the year. Show the number of drums that should be
produced each month...
Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects...
Patrick Inc. makes industrial solvents. In the first 4 months of
the coming year, Patrick expects the following unit sales:
January
41,000
February
38,000
March
50,000
April
51,000
Patrick's policy is to have 23% of next month's sales in ending
inventory. On January 1, it is expected that there will be 4,500
drums of solvent on hand.
Required:
Prepare a production budget for the first quarter of the year.
Show the number of drums that should be produced each month...
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June
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containers, which have the following price and variable costs.
Sales price
$
56
Direct
material
20
Direct
labor
12
Variable
overhead
15
Budgeted fixed
overhead in 20x1, the company’s first year of operations, was
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Skinny Dippers, Inc. produces nonfat frozen yogurt. The product is sold in ten-gallon containers, which have...
Skinny Dippers, Inc. produces nonfat frozen yogurt. The product
is sold in ten-gallon containers, which have the following price
and variable costs.
Sales price
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Direct material
11
Direct labor
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Variable overhead
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Budgeted fixed overhead in 20x1, the company’s first year of
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Variable overhead
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for the year
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1
per...
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