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.

Solutions

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 10 months ago

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