Exercise 7-7 (Algo) Manufacturing: Direct materials budget LO P1 Rida Incorporated is preparing its direct materials budget for the second quarter. It budgets production of 242,000 units in the second quarter and 54,500 units in the third quarter. Each unit requires 0.60 pound of direct material, priced at $177 per pound. Starting with the second quarter, the company plans to end each quarter with an ending inventory of materials equal to 40% of next quarter's budgeted direct materials required. Raw material inventory is 58,080 pounds at the beginning of the second quarter. Prepare a direct materials budget for the second quarter. Note: Enter "per unit" answers in two decimal places. Units to produce RIDA INCORPORATED Direct Materials Budget Materials needed for production (pounds) Total materials required Materials to purchase (pounds) Cost of direct materials purchases Second Quarter 242,000 units

Exercise 7-7 (Algo) Manufacturing: Direct materials budget LO P1 Rida Incorporated is preparing its direct materials budget for the second quarter. It budgets production of 242,000 units in the second quarter and 54,500 units in the third quarter. Each unit requires 0.60 pound of direct material, priced at $177 per pound. Starting with the second quarter, the company plans to end each quarter with an ending inventory of materials equal to 40% of next quarter's budgeted direct materials required. Raw material inventory is 58,080 pounds at the beginning of the second quarter. Prepare a direct materials budget for the second quarter. Note: Enter "per unit" answers in two decimal places. Units to produce RIDA INCORPORATED Direct Materials Budget Materials needed for production (pounds) Total materials required Materials to purchase (pounds) Cost of direct materials purchases Second Quarter 242,000 units

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 3CE: Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls....

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Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKicks policy is that 20 percent of the following months production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement. Required: 1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year. 2. What if FlashKick decreased the ending inventory percentage to 15 percent of the next months production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1? Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget?
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Pasadena Candle Inc. budgeted production of 785,000 candles for January. Wax is required to produce a candle. Assume 10 ounces of wax is required for each candle. The estimated January 1 wax inventory is 16,000 pounds. The desired January 31 wax inventory is 12,500 pounds. If candle wax costs 1.24 per pound, determine the direct materials purchases budget for January.
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Pasadena Candle Inc. budgeted production of 785,000 candles for January. Each candle requires molding. Assume that six minutes are required to mold each candle. If molding labor costs 18 per hour, determine the direct labor cost budget for January.
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