In: Finance
Information about Roboto, a product sold by Roberts, Inc. is as follows: Each unit requires four pounds of material X37. Roberts is planning raw materials needs for the second quarter. Inventory requirements are as follows: |
a. |
The finished goods inventory on hand at the end of each month must be equal to 6,000 units plus 26% of the next month’s sales. The finished goods inventory on March 31 is budgeted based on this requirement. |
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 March 31 for material X37 is budgeted based on this requirement. |
c. | The company maintains no work in process inventories. |
A sales budget for Roboto for the second and third quarters of the year follows. |
Budgeted
Sales in Units |
|
April | 47,000 |
May | 57,000 |
June | 77,000 |
July | 42,000 |
August | 27,000 |
September | 17,000 |
Required: | |
. |
Prepare a production budget for Roboto for the months April, May, June and July. |
. |
Prepare a direct materials budget showing the quantity of material X37 to be purchased for April, May, June and for the quarter in total. |
Production budget | |||||
April | May | June | July | ||
Sales | 47000 | 57000 | 77000 | 42000 | |
Closing stock | 20820 | 26020 | 16920 | 6000 | |
Less: Opening stock | 18220 | 20820 | 26020 | 16920 | |
49600 | 62200 | 67900 | 31080 | ||
Closing stock | |||||
April | May | June | July | August | |
Sales | 47000 | 57000 | 77000 | 42000 | 27000 |
Fixed qty | 6000 | 6000 | 6000 | 6000 | |
26% of sales (Next month) | 14820 | 20020 | 10920 | 0 | |
20820 | 26020 | 16920 | 6000 | ||
Oprning stock | |||||
April | May | June | July | August | |
Sales | 47000 | 57000 | 77000 | 42000 | 27000 |
Fixed qty | 6000 | 6000 | 6000 | 6000 | |
26% of sales | 12220 | 14820 | 20020 | 10920 | |
18220 | 20820 | 26020 | 16920 |
Material budget | ||||
April | May | June | ||
Sales | 47000 | 57000 | 77000 | |
Closing stock | 28500 | 38500 | 21000 | |
Less: Opening stock | 23500 | 28500 | 38500 | |
52000 | 67000 | 59500 | ||
Closing stock | ||||
April | May | June | July | |
Sales | 47000 | 57000 | 77000 | 42000 |
0.5 of sales (Next month) | 28500 | 38500 | 21000 | |
Oprning stock | ||||
April | May | June | July | |
Sales | 47000 | 57000 | 77000 | 42000 |
0.5 of sales | 23500 | 28500 | 38500 | |
Material budget | |
QTR | |
Sales | 181000 |
Closing stock | 21000 |
Less: Opening stock | 23500 |
178500 | |
Closing stock | |
July | |
Sales | 42000 |
0.5 of sales (Next month) | 21000 |
Oprning stock | |
April | |
Sales | 47000 |
0.5 of sales | 23500 |