Question

GableGable

Manufacturing produces​ self-watering planters for use in upscale retail establishments. Sales projections for the first five months of the upcoming year show the estimated unit sales of the planters each month to be as​ follows:

​(Click the icon to view additional​ information.)  Inventory at the start of the year was 900

planters. The desired inventory of planters at the end of each month should be equal to 25%

of the following​ month's budgeted sales. Each planter requires two

pounds of polypropylene​ (a type of​ plastic). The company wants to have 10​%

of the polypropylene required for next​ month's production on hand at the end of each month. The polypropylene costs $ 0.20 per pound.Read the requirements
LOADING....

1.	Prepare a production budget for each month in the first quarter of the​ year, including production in units for each month and for the quarter.
2.	Prepare a direct materials budget for the polypropylene for each month in the first quarter of the​ year, including the pounds of polypropylene required and the total cost of the polypropylene to be purchased.

	Number of planters to be sold
January. . . . . .	3,600
February. . . . .	3,300
March. . . . . . . .	3,100
April. . . . . . . . .	4,700
May. . . . . . . . .	4,900

Gable Manufacturing
Production Budget
For the Months of January through March
		January	February	March	Quarter
Unit sales		3,600	3,300	3,100	10,000
Plus:	Desired ending inventory
Total needed
Less:	Beginning inventory
Units to produce

Requirement 2. Prepare a direct materials budget for the polypropylene for each month in the first quarter of the​ year, including the pounds of polypropylene required and the total cost of the polypropylene to be purchased.

Start by preparing the direct materials budget through the total quantity​ needed, then complete the budget.

Gable Manufacturing
Direct Materials Budget
For the Months of January through March
		January	February	March	Quarter
Units to be produced
Multiply by:	Quantity of direct materials needed per unit
Quantity needed for production
Plus:	Desired ending inventory of direct materials
Total quantity needed

Answer 1

Gable Manufacturing
Production Budget
For the Months of January through March
		January	February	March	Quarter
Unit sales		3,600	3,300	3,100	10,000
Plus:	Desired ending inventory	825	775	1175	1175
Total needed		4425	4075	4275	11175
Less: Beginning inventory		-900	-825	-775	-900
Units to produce		3525	3250	3500	10275

Direct material Budget

Gable Manufacturing
Direct Materials Budget
For the Months of January through March
		January	February	March	Quarter
Units to be produced		3525	3250	3500	10275
Multiply by:	Quantity of direct materials needed per unit	2	2	2	2
Quantity needed for production		7050	6500	7000	20550
Plus:	Desired ending inventory of direct materials	650	700	950	950
	Total quantity needed	7700	7200	7950	21500
Less:	Beginning inventory	-705	-650	-700	-705
	Direct material purchase	6995	6550	7250	20795
	Cost per pound	0.20	0.20	0.20	0.20
	Cost of purchase	1399	1310	1450	4159