On January 1, 2020, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2020.Sales units: First quarter 5,000; second quarter 6,900; third quarter 7,300.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, 2019, follow the same percentage relationships to production and sales that occur in 2020. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $6 per pound. (A) Prepare a production budget by quarters for the 6-month period ended June 30, 2020.HARDIN COMPANYProduction Budget For the Six Months Ending June 30, 2020June 30, 2020For the Quarter Ending June 30, 2020 Quarter 1 2 SixMonths Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units AddLess: Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units AddLess: Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units (B) Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2020.HARDIN COMPANYDirect Materials Budget For the Six Months Ending June 30, 2020June 30, 2020For the Quarter Ending June 30, 2020 Quarter 1 2 Six Months Beginning Direct Materials (Pounds)Cost Per PoundDesired Ending Direct Materials (Pounds)Direct Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials RequiredTotal Pounds Needed for ProductionTotal Required Direct Labor HoursUnits to be Produced AddLess: Beginning Direct Materials (Pounds)Cost Per PoundDesired Ending Direct Materials (Pounds)Direct Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials RequiredTotal Pounds Needed for ProductionTotal Required Direct Labor HoursUnits to be Produced AddLess: Beginning Direct Materials (Pounds)Cost Per PoundDesired Ending Direct Materials (Pounds)Direct Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials RequiredTotal Pounds Needed for ProductionTotal Required Direct Labor HoursUnits to be Produced Beginning Direct Materials (Pounds)Cost Per PoundDesired Ending Direct Materials (Pounds)Direct Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials RequiredTotal Pounds Needed for ProductionTotal Required Direct Labor HoursUnits to be Produced $ $ $ $ $

Answered: On January 1, 2020, the Hardin Company…

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 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...

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On January 1, 2020, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2020.

Sales units:		First quarter 5,000; second quarter 6,900; third quarter 7,300.
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, 2019, follow the same percentage relationships to production and sales that occur in 2020. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $6 per pound.

(A) Prepare a production budget by quarters for the 6-month period ended June 30, 2020.

HARDIN COMPANY Production Budget For the Six Months Ending June 30, 2020June 30, 2020For the Quarter Ending June 30, 2020
	Quarter
		1	2	Six Months
Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units
AddLess: Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units
Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units
AddLess: Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units

(B) Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2020.

HARDIN COMPANY Direct Materials Budget For the Six Months Ending June 30, 2020June 30, 2020For the Quarter Ending June 30, 2020
	Quarter
	1	2	Six Months
Beginning Direct Materials (Pounds)Cost Per PoundDesired Ending Direct Materials (Pounds)Direct Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials RequiredTotal Pounds Needed for ProductionTotal Required Direct Labor HoursUnits to be Produced


AddLess: Beginning Direct Materials (Pounds)Cost Per PoundDesired Ending Direct Materials (Pounds)Direct Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials RequiredTotal Pounds Needed for ProductionTotal Required Direct Labor HoursUnits to be Produced

AddLess: Beginning Direct Materials (Pounds)Cost Per PoundDesired Ending Direct Materials (Pounds)Direct Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials RequiredTotal Pounds Needed for ProductionTotal Required Direct Labor HoursUnits to be Produced
Beginning Direct Materials (Pounds)Cost Per PoundDesired Ending Direct Materials (Pounds)Direct Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Materials RequiredTotal Pounds Needed for ProductionTotal Required Direct Labor HoursUnits to be Produced
	$	$
	$	$	$

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