Question

Exercise 23-6 On January 1, 2017, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2017. Sales units: First quarter 5,300; second quarter 6,000; third quarter 7,800 Ending raw materials inventory: 40% of the next quarter’s production requirements Ending finished goods inventory: 25% of the next quarter’s expected sales units Third-quarter production: 7,360 units. The ending raw materials and finished goods inventories at December 31, 2016, follow the same percentage relationships to production and sales that occur in 2017. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound. Prepare a production budget by quarters for the 6-month period ended June 30, 2017. HARDIN COMPANY Production Budget Quarter 1 2 Year : : LINK TO TEXT Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2017. HARDIN COMPANY Direct Materials Budget Quarter 1 2 Six Months : : $ $ $ $ $

Answer 1

Answer:

A)

(a) Prepare a production budget by quarters for the 6-month period ended June 30, 2017

Hardin Company
Production Budget
For the Six Months Ending June 30, 2017
	Quarter		Six Months
	1	2
Expected Unit Sales	5,300	6,000	11,300
Add: Desired ending FG units	1,500	1,950	1,950
Total Required Units	6,800	7,950	13,250
Less: Beginning FG units	1,325	1,500	1,325
Required Production Units	5,475	6,450	11,925

________________________________

(b) Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2017.

Hardin Company
Direct Materials Budget
For the Six Months Ending June 30, 2017
	Quarter
	1	2	Six Months
Units to be produced	5,475	6,450	11,925
Direct materials per unit	3	3	3
Total pounds needed for production	16,425	19,350	35,775
Add: Desired ending DM (lbs)	7,740	8,832	8,832
Total materials required	24,165	28,182	44,607
Less: Beginning DM (lbs)	6,570	7,740	6,570
Direct materials purchases	17,595	20,442	38,037
Cost per pound	$               4.00	$          4.00	$          4.00
Total cost of direct materials purchases	70,380	81,768	152,148

Working notes for the above answer is as under

W.N-1

W.N-2