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In: Accounting

Exercise 10-7 Lawn Industrial has estimated that production for the next five quarters will be: Production...

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
Direct Materials Purchases Budget
For the Year Ending December 31, 2017

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Year

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

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

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

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

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

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

 $ $ $ $ $

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ekkarill92 answered 2 years ago
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