Question
In: Accounting
Arnold Co. budgeted to sell 11,500 units of Gizmo in September. Production of one unit of...
Arnold Co. budgeted to sell 11,500 units of Gizmo in September.
Production of one unit of Gizmo requires two (2) pounds of aluminum
and four (4) pounds of steel powder. The beginning inventory and
the desired ending inventory are as follows:
|
Beginning Inventory |
Desired Ending Inventory |
||||
|
Gizmo |
2,400 |
units |
3,300 |
units |
|
|
Aluminum |
1,500 |
pounds |
1,700 |
pounds |
|
|
Steel powder |
1,300 |
pounds |
1,000 |
pounds |
|
a) Production budget: How many units of Gizmo should Arnold plan to
make in September?
b) Direct materials production budget, Aluminum and Steel Powder: Ignore your answer in (a). If Arnold plans to manufacture 15,000 units of Gizmo in September, how much Aluminum and how much Steel powder in pounds only does Arnold need for production in September?
c) Direct materials purchases budget, Aluminum: How many pounds of Aluminum does Arnold Co. need to purchase during September if Arnold plans to manufacture 15,000 units of Gizmo in September?
Solutions
Expert Solution
| Answer : A Production Budget | |
| Arnold Company | |
| Production Budget September | |
| Gizmo | |
| Particulars | Units |
| Budgeted Sales (A) | 11500 |
| Desired Ending Inventory (B) | 3300 |
| Total Units Required C= (A+B) | 14800 |
| Beginning Inventory (D) | 2400 |
| Units To be Produced C-D | 12400 |
| Answer : b If Company plans to produce 12400 units of Gizmo | ||
| Direct Materials Purchase Budget | ||
| Arnold Company | ||
| Purchase Budget September | ||
| Aluminum | ||
| Particulars | Pounds | |
| Required to Manufacture Gizmo (12400X2) | 24800 | |
| Desired Ending Inventory (B) | 1700 | |
| Total Units Required C= (A+B) | 26500 | |
| Beginning Inventory (D) | 1500 | |
| Units To be Purchased C-D | 25000 | |
| Arnold Company | ||
| Purchase Budget September | ||
| Steel powder | ||
| Particulars | Pounds | |
| Required to Manufacture Gizmon (12400X4) | 49600 | |
| Desired Ending Inventory (B) | 1000 | |
| Total Units Required C= (A+B) | 50600 | |
| Beginning Inventory (D) | 1300 | |
| Units To be Purchased C-D | 49300 | |
| b) Direct Material Needed to produce 15000 units of Gizmo | ||
| Arnold Company | ||
| Direct Material Needed to produce 15000 units of Gizmo | ||
| Particulars | Pounds | Pounds |
| Required to Manufacture Gizmo | 30000 | 60000 |
| Answer : (C) If Company plans to produce 15000 units of Gizmo | |
| Direct Materials Purchase Budget | |
| Arnold Company | |
| Purchase Budget September | |
| Aluminum | |
| Particulars | Pounds |
| Required to Manufacture Gizmo (15000X2) | 30000 |
| Desired Ending Inventory (B) | 1700 |
| Total Units Required C= (A+B) | 31700 |
| Beginning Inventory (D) | 1500 |
| Units To be Purchased C-D | 30200 |
| Arnold Company | |
| Purchase Budget September | |
| Steel powder | |
| Particulars | Pounds |
| Required to Manufacture Gizmo (15000X4) | 60000 |
| Desired Ending Inventory (B) | 1000 |
| Total Units Required C= (A+B) | 61000 |
| Beginning Inventory (D) | 1300 |
| Units To be Purchased C-D | 59700 |
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ekkarill92 answered 2 years agoRelated Solutions
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