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Jim’s Donuts is developing its production and raw materials budget for the next 3 days. The...

Jim’s Donuts is developing its production and raw materials budget for the next 3 days. The company’s management projects sales of 600 batches of donuts on Monday; 500 batches on Tuesday; 700 on Wednesday and 900 on Thursday.

Jim plans to have 10% of the donuts sold the next day already made the previous day (in ending Finished Goods Inventory). Jim also has 20% of the raw materials of sugar and flour on hand at the beginning of the day before daily purchases are made. Jim uses 2 pounds of sugar and 5 pounds of flour for each batch of donuts made. Jim plans to end Wednesday with 360 pounds of sugar and 900 pounds of flour. There is no Work in Process Inventory.

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Expert Solution

Production Budget
Monday Tuesday Wednesday
Sales units 600 500 700
Add : Desired Ending Inventory 50 70 90
Total Goods Required 650 570 790
Less : Beginning Inventory 60 50 70
Production Required 590 520 720
Direct Material Budget (Sugar)
Monday Tuesday Wednesday
Units to be produced 590 520 720
Material per unit 2 2 2
Raw Material for Production 1180 1040 1440
Add : Desired Ending Inventory 208 288 360
Total Material Required 1388 1328 1800
Less : Beginning Inventory 236 208 288
Sugar to be purchased (Pounds) 1152 1120 1512
Direct Material Budget (Flour)
Monday Tuesday Wednesday
Units to be produced 590 520 720
Material per unit 5 5 5
Raw Material for Production 2950 2600 3600
Add : Desired Ending Inventory 520 720 900
Total Material Required 3470 3320 4500
Less : Beginning Inventory 590 520 720
Flour to be purchased (Pounds) 2880 2800 3780

ekkarill92 answered 1 year ago
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