Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700...

Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The company’s policy is to have enough material on hand to equal 10% of the next month’s production needs and to maintain a finished goods inventory equal to 25% of the next month’s production needs. What is the budgeted cost of purchases for March?

Expert Solution

Ans.	Sunrise Poles
	Direct Materials Budget
	For the Month of March
	Particulars	March
	Units to be produced	4000
	(X) Direct materials per unit	0.5
	Total pounds needed for production	2000
	Add: Desired ending direct materials (pounds)	185
	Total materials required	2185
	Less: Beginning direct materials (pounds)	-200
	Materials to be purchased	1985
	(X) Cost per pound	$1.20
	Budgeted cost of purchase	$2,382

	*Working Notes:

	*Calculations for materials needed for production:

	Particulars	April
	Units to be produced	3700
	(X) Direct materials per unit	0.5
	Total pounds needed for production	1850

	Ending inventory of March = Total pounds needed in April 10%
	1,850 * 10% = 185

	*Beginning materials inventory for March = Ending materials inventory of February = 10% of March month's pounds needed
	2,000 * 10% = 200

ekkarill92 answered 3 years ago

Marblex manufactures marble statues. In March, the two production departments had budgeted allocation bases of 4,000...

Marblex manufactures marble statues. In March, the two production departments had budgeted allocation bases of 4,000 machine-hours in Department X and 8,000 direct manufacturing labor-hours in Department Y. The budgeted manufacturing overheads for the month were $60,000 and $64,000, respectively. For Job A, the actual costs incurred in the two departments were as follows: Department X Department Y Direct materials purchased on account $110,000 $177,500 Direct materials used 40,000 13,500 Direct manufacturing labor 55,000 53,500 Indirect manufacturing...

The Assembly Department produced 4,000 units of product during March. Each unit required 1.5 standard direct...

The Assembly Department produced 4,000 units of product during March. Each unit required 1.5 standard direct labor hours. There were 6,400 actual hours used in the Assembly Department during March at an actual rate of $14.5 per hour. The standard direct labor rate is $15.5 per hour. Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on March 31. For a compound transaction, if an...

Bernie, Ltd. manufactures a single product. During the month of November, 4,000 units were sold for...

Bernie, Ltd. manufactures a single product. During the month of November, 4,000 units were sold for $490, while 4,800 units were produced. Their November variable costing income statement showed the following expenses: Variable Cost of Goods Sold: $588,000 Variable Selling and Administrative: $156,800 Fixed Manufacturing: $705,600 Fixed Selling and Administrative: $176,400 If November 1 inventory was 1,600 units, what is the value of the November 30 finished goods inventory under absorption costing?

Rey Company manufactures 4,000 units of processor chip, A-772, each year for use on its production...

Rey Company manufactures 4,000 units of processor chip, A-772, each year for use on its production line. At this level of activity, the cost per unit of processor chip is: Direct materials $ 354 Direct labor 20 Variable manufacturing overhead 8 Fixed manufacturing overhead 80 Total manufacturing cost per unit $ 462 An outside supplier has offered to sell all units of processor chip the company requires. If the company decided to discontinue making processor chip, 5% of the above...

1. Griffith Company manufactures suitcases. The company is currently producing and selling 40,000 units per year...

1. Griffith Company manufactures suitcases. The company is currently producing and selling 40,000 units per year and it has the capacity to produce 42,000 units per year. The following information relates to current production: Sale price per unit $195 Costs per unit: Variable Manufacturing $80 Fixed Manufacturing $15 Variable Selling and Administrative $45 Fixed Selling and Administrative $10 Griffith is considering an order from a new customer for 2,000 suitcases at a total price of price of $250,000. Assume that...

Lemon Company manufactures a single product. The company manufactured 5,000 units in March, using 6,150 pounds...

Lemon Company manufactures a single product. The company manufactured 5,000 units in March, using 6,150 pounds of material and 2,420 labor hours. During the same month, they purchased 6,200 pounds of material for $151,590. The actual labor cost for March was $39,930. There were no beginning or ending work-in-process inventories. The company has the following unit standard costs for direct materials and labor. Budgeted quantity Per unit Budgeted price Direct materials 1.20 pounds $25 per pound Direct labor 0.50 hours...

Question