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In: Finance

Information about Roboto, a product sold by Roberts, Inc. is as follows: Each unit requires four...

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.

Solutions

Expert Solution

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

jeff jeffy answered 1 year ago
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