In: Accounting
Exercise 10-7
Lawn Industrial has estimated that production for the next five quarters will be:
Production Information | ||
1st quarter, 2017 | 42,000 units | |
2nd quarter, 2017 | 38,000 units | |
3rd quarter, 2017 | 45,000 units | |
4th quarter, 2017 | 37,000 units | |
1st quarter, 2018 | 44,000 units |
Finished units of production require 6 pounds of raw material per
unit. The raw material cost is $5 per pound. There is $214,200 of
raw material on hand at the beginning of the first quarter, 2017.
Lawn desires to have 17 percent of next quarter's material
requirements on hand at the end of each quarter.
Prepare quarterly direct materials purchases budgets for Lawn
Industrial for 2017.
Lawn Industrial |
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Quarter 1 |
Quarter 2 |
Quarter 3 |
Quarter 4 |
Year |
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Total material neededCost of raw material needed for productionUnits to be producedCost of raw material per unitDesired ending inventory of raw materialBeginning inventory of raw materialRequired raw material purchases |
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Cost of raw material needed for productionDesired ending inventory of raw materialCost of raw material per unitTotal material neededBeginning inventory of raw materialRequired raw material purchasesUnits to be produced |
$ | $ | $ | $ | $ | ||||||
Cost of raw material needed for productionCost of raw material per unitDesired ending inventory of raw materialUnits to be producedTotal material neededBeginning inventory of raw materialRequired raw material purchases |
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AddLess :Desired ending inventory of raw materialRequired raw material purchasesTotal material neededBeginning inventory of raw materialCost of raw material per unitCost of raw material needed for productionUnits to be produced |
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Total material neededCost of raw material per unitDesired ending inventory of raw materialUnits to be producedBeginning inventory of raw materialRequired raw material purchasesCost of raw material needed for production |
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AddLess :Cost of raw material per unitCost of raw material needed for productionBeginning inventory of raw materialTotal material neededRequired raw material purchasesUnits to be producedDesired ending inventory of raw material |
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Beginning inventory of raw materialCost of raw material needed for productionRequired raw material purchasesUnits to be producedCost of raw material per unitDesired ending inventory of raw materialTotal material needed |
$ | $ | $ | $ | $ |