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3. Calculate the ending inventory of drums for December of the prior year, and for
January
and
February
. Round your answers to the nearest whole drum.
Ending inventory for December: _________________ drums
Ending inventory for January: _________________ drums
Ending inventory for February: _________________ drums
4. Prepare a direct materials purchases budget for drums for the months of January and February. Round Drums per unit to one decimal place. Round Price per drum to the nearest cent. Round Dollar purchases to the nearest dollar. Round all the other values to the nearest whole unit. Do not include a multiplication symbol as part of your answer.
Patrick Inc. Direct Materials Purchases Budget
– Drums For the Months of January and February January February Production in units Drums per unit Drums for production Desired ending inventory Needed Less: Beginning inventory Direct materials to be purchased Price per drum $ $ Dollar purchases $ $ 4.
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Cornerstone Exercise 9-24 (Algorithmic) Preparing a Direct Labor Budget
Patrick Inc. makes industrial solvents. Planned production in units for the first three months of the coming year is:
|
40,000 |
|||
|
55,000 |
|||
|
March |
60,000 |
Each drum of industrial solvent takes 0.3 direct labor hours. The average wage is $17.10 per hour.
|
Prepare a direct labor budget for the months of January, February, and March, as well as the total for the first quarter. Do not include a multiplication symbol as part of your answer. Patrick Inc. Direct Labor Budget For the Coming First Quarter Direct Labor Budget: January February March TotalUnits to be produced Direct labor hrs per unit Total direct labor hrs Wage rate $ $ $ $ Direct labor cost $ $ $ $ |
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Exercise 9-35 Production Budget
Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. Projected sales (number of speakers) for the coming five quarters are as follows:
The vice president of sales believes that the projected sales are realistic and can be achieved by the company.
Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Asia). Beginning inventory of S12L7 for the first quarter of 2012 was 340 boxes. The company’s policy is to have 20 percent of the next quarter’s sales of S12L7 in ending inventory. Beginning inventory of S12L5 was 170 boxes. The company’s policy is to have 30 percent of the next quarter’s sales of S12L5 in ending inventory.
|
Prepare a production budget for S12L7 for each quarter for 2012 and for the year in total. Stillwater Designs Production Budget for S12L7 For the Year Ended December 31, 2012 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. TotalSales Desired ending inventory Total needs Less: Beginning inventory Units produced |
|
Prepare a production budget for S12L5 for each quarter for 2012 and for the year in total. Stillwater Designs Production Budget for S12L5 For the Year Ended December 31, 2012 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. TotalSales Desired ending inventory Total needs Less: Beginning inventory Units produced |
6.
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Exercise 9-36 (Algorithmic) Production Budget and Direct Materials Purchases Budgets
Smee Inc. produces all-natural organic peanut butter. The peanut butter is sold in 12-ounce jars. The sales budget for the first four months of the year is as follows:
|
Unit Sales |
Dollar Sales ($) |
|
|
$114,000 |
||
|
70,000 |
133,000 |
|
|
80,000 |
152,000 |
|
|
April |
50,000 |
95,000 |
Company policy requires that ending inventories for each month be 10 percent of next month’s sales. At the beginning of January, the inventory of peanut butter is 35,000 jars. Each jar of peanut butter needs two raw materials: 24 ounces of peanuts and one jar. Company policy requires that ending inventories of raw materials for each month be 20 percent of the next month’s production needs. That policy was met on January 1.
|
1. Prepare a production budget for the first quarter of the year. Show the number of jars that should be produced each month as well as for the quarter in total. Smee Inc. Production Budget For the First Quarter of the Year January February March TotalSales Desired ending inventory Total needs Less: Beginning inventory Units produced |
|
2a. Prepare a direct materials purchases budget for jars for the months of January and February. Do not include a multiplication symbol as part of your answer. Smee, Inc. Direct Materials Purchases Budget for Jars For January and February January February TotalProduction Jar Jars for production Desired ending inventory Total needs Less: Beginning inventory Jars purchased |
|
2b. Prepare a direct materials purchases budget for peanuts for the months of January and February. Do not include a multiplication symbol as part of your answer. Smee, Inc. Direct Materials Purchases Budget for Peanuts For January and February January February TotalProduction Ounces Ounces for production Desired ending inventory Total needs Less: Beginning inventory Ounces purchased |
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Exercise 9-37 Production Budget
Pumpro Inc. produces submersible water pumps for ponds and cisterns. The unit sales for selected months of the year are as follows:
Company policy requires that ending inventories for each month be 30 percent of next month’s sales. However, at the beginning of April, due to greater sales in March than anticipated, the beginning inventory of water pumps is only 40,000.
|
Prepare a production budget for the second quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total. Pumpro Inc. Production Budget For the Second Quarter April May June TotalSales Desired ending inventory Total needs Less: Beginning inventory Units produced |
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Exercise 9-38 Direct Materials Purchases Budget
You may use the attached spreadsheet to help you complete this activity, but you are not required to do so. You will find the spreadsheet by clicking on the link in the drop-down menu above.
Fang Company produces decorative plastic items, including hollow plastic pumpkins often used by trick-or-treaters for Halloween. Each pumpkin requires about 5 ounces of plastic costing $0.08 per ounce. Fang molds the plastic into a pumpkin shape and applies decoration to the outside of each pumpkin. Fang has budgeted production of the pumpkins for the next four months as follows:
Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 20 percent of the following month’s production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.
|
Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. Fang Company Direct Materials Purchases Budget For July, August, and September July August September TotalUnits to be produced Direct materials per unit Production needs Desired ending inventory Total needs Less: Beginning inventory Direct materials to be purchased Cost per ounce $ 0.08 $ 0.08 $ 0.08 $ 0.08 Total purchase cost $ $ $ $ |
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Exercise 9-34 Sales Budget
Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers) for the coming five quarters are as follows:
The vice president of sales believes that the projected sales are realistic and can be achieved by the company.
|
1. Prepare a sales budget for each quarter of 2012 and for the year in total. Show sales by product and in total for each time period. Do not include a multiplication symbol as part of your answer. Stillwater Designs Sales Budget For the Year Ended December 31, 2012 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. TotalS12L7: Units Price $ $ $ $ $ Sales $ $ $ $ $ S12L5: Units Price $ $ $ $ $ Sales $ $ $ $ $ Total sales $ $ $ $ |
2. How will Stillwater Designs use this sales budget?
The input in the box below will not be graded, but may be reviewed and considered by your instructor. _________________
|
Assignment: Chapter 9 LO 1, 2 |
1. Preparing a Sales Budget
Patrick Inc. sells industrial solvents in five-gallon drums. Patrick expects the following units to be sold in the first three months of the coming year:
The average price for a drum is $3
8.
|
Prepare a sales budget for the first three months of the coming year, showing units and sales revenue by month and in total for the quarter. Do not include a multiplication symbol as part of your answer. Patrick Inc. Sales Budget For the Coming Quarter |
January |
February |
March |
2. Preparing a Production Budget
Patrick Inc. makes industrial solvents. In the first four months of the coming year, Patrick expects the following unit sales:
Patrick’s policy is to have 25 percent of next month’s sales in ending inventory. On January 1, it is expected that there will be 4,600 drums of solvent on hand.
|
Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total. If required, round your answers to the nearest whole unit. Patrick Inc. Production Budget For the Coming Quarter January February March Total Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced
|
3. Preparing a Direct Materials Purchases Budget
Patrick Inc. makes industrial solvents sold in five-gallon drums. Planned production in units for the first three months of the coming year is:
|
40,000 |
|
|
50,000 |
|
|
65,000 |
Each drum requires 6 gallons of chemicals and one plastic drum. Company policy requires that ending inventories of raw materials for each month be 20 percent of the next month’s production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one drum is $1.60.
1. Calculate the ending inventory of chemicals in gallons for December of the prior year, and for January and February. What is the beginning inventory of chemicals for January? Round your answers to the nearest whole gallon.
Ending inventory for December: _________________ gallons
Ending inventory for January: _________________ gallons
Ending inventory for February: _________________ gallons
Beginning inventory for January: _________________ gallons
|
2. Prepare a direct materials purchases budget for chemicals for the months of January and February. Round Gallons per unit to one decimal place. Round Price per gallon to the nearest cent. Round Dollar purchases to the nearest dollar. Round all the other values to the nearest whole unit. Do not include a multiplication symbol as part of your answer. Patrick Inc. Direct Materials Purchases Budget – Chemicals in Gallons For the Months of January and February January February Production in units
Gallons per unit
Gallons for production
Desired ending inventory
Needed
Less: Beginning inventory
Direct materials to be purchased
Price per gallon $ $ Dollar purchases $ $
|
3. Calculate the ending inventory of drums for December of the prior year, and for January and February. Round your answers to the nearest whole drum.
Ending inventory for December: _________________ drums
Ending inventory for January: _________________ drums
Ending inventory for February: _________________ drums
4.
Prepare a direct materials purchases budget for drums for the months of January and February. Round Drums per unit to one decimal place. Round Price per drum to the nearest cent. Round Dollar purchases to the nearest dollar. Round all the other values to the nearest whole unit. Do not include a multiplication symbol as part of your answer.
Patrick Inc.
Direct Materials Purchases Budget – Drums
For the Months of January and February
January
February
Production in units
Drums per unit
Drums for production
Desired ending inventory
Needed
Less: Beginning inventory
Direct materials to be purchased
Price per drum
$
$
Dollar purchases
$
$
4.
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VideoVideoVideoVideoVideoVideoVideoVideoVideo
Cornerstone Exercise 9-24 (Algorithmic)
Preparing a Direct Labor Budget
Patrick Inc. makes industrial solvents. Planned production in units for the first three months of the coming year is:
|
55,000 |
|
|
60,000 |
Each drum of industrial solvent takes 0.3 direct labor hours. The average wage is $1
7.
10 per hour.
|
Prepare a direct labor budget for the months of January, February, and March, as well as the total for the first quarter. Do not include a multiplication symbol as part of your answer. Patrick Inc. Direct Labor Budget For the Coming First Quarter Direct Labor Budget: January February March Total Units to be produced
Direct labor hrs per unit
Total direct labor hrs
Wage rate $ $ $ $ Direct labor cost $ $ $ $
|
5.
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Exercise 9-35
Production Budget
Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. Projected sales (number of speakers) for the coming five quarters are as follows:
The vice president of sales believes that the projected sales are realistic and can be achieved by the company.
Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Asia). Beginning inventory of S12L7 for the first quarter of 2012 was 340 boxes. The company’s policy is to have 20 percent of the next quarter’s sales of S12L7 in ending inventory. Beginning inventory of S12L5 was 170 boxes. The company’s policy is to have 30 percent of the next quarter’s sales of S12L5 in ending inventory.
|
Prepare a production budget for S12L7 for each quarter for 2012 and for the year in total. Stillwater Designs Production Budget for S12L7 For the Year Ended December 31, 2012 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Total Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced
|
|
Prepare a production budget for S12L5 for each quarter for 2012 and for the year in total. Stillwater Designs Production Budget for S12L5 For the Year Ended December 31, 2012 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Total Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced
|
6.
eBookeBookeBookeBookeBookeBookeBookeBookeBook SpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheet
Exercise 9-36 (Algorithmic)
Production Budget and Direct Materials Purchases Budgets
Smee Inc. produces all-natural organic peanut butter. The peanut butter is sold in 12-ounce jars. The sales budget for the first four months of the year is as follows:
|
Unit Sales |
Dollar Sales ($) |
|
$114,000 |
|
|
70,000 |
133,000 |
|
80,000 |
152,000 |
|
April |
95,000 |
Company policy requires that ending inventories for each month be 10 percent of next month’s sales. At the beginning of January, the inventory of peanut butter is 35,000 jars.
Each jar of peanut butter needs two raw materials: 24 ounces of peanuts and one jar. Company policy requires that ending inventories of raw materials for each month be 20 percent of the next month’s production needs. That policy was met on January 1.
|
1. Prepare a production budget for the first quarter of the year. Show the number of jars that should be produced each month as well as for the quarter in total. Smee Inc. Production Budget For the First Quarter of the Year January February March Total Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced
|
|
2a. Prepare a direct materials purchases budget for jars for the months of January and February. Do not include a multiplication symbol as part of your answer. Smee, Inc. Direct Materials Purchases Budget for Jars For January and February January February Total Production
Jar
Jars for production
Desired ending inventory
Total needs
Less: Beginning inventory
Jars purchased
|
|
2b. Prepare a direct materials purchases budget for peanuts for the months of January and February. Do not include a multiplication symbol as part of your answer. Smee, Inc. Direct Materials Purchases Budget for Peanuts For January and February January February Total Production
Ounces
Ounces for production
Desired ending inventory
Total needs
Less: Beginning inventory
Ounces purchased
|
7.
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Exercise 9-37
Production Budget
Pumpro Inc. produces submersible water pumps for ponds and cisterns. The unit sales for selected months of the year are as follows:
Company policy requires that ending inventories for each month be 30 percent of next month’s sales. However, at the beginning of April, due to greater sales in March than anticipated, the beginning inventory of water pumps is only 40,000.
|
Prepare a production budget for the second quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total. Pumpro Inc. Production Budget For the Second Quarter April May June Total Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced
|
8.
eBookeBookeBookeBookeBookeBookeBookeBookeBook SpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheetSpreadsheet
Exercise 9-38
Direct Materials Purchases Budget
You may use the attached spreadsheet to help you complete this activity, but you are not required to do so. You will find the spreadsheet by clicking on the link in the drop-down menu above.
Fang Company produces decorative plastic items, including hollow plastic pumpkins often used by trick-or-treaters for Halloween. Each pumpkin requires about 5 ounces of plastic costing $0.08 per ounce. Fang molds the plastic into a pumpkin shape and applies decoration to the outside of each pumpkin. Fang has budgeted production of the pumpkins for the next four months as follows:
Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 20 percent of the following month’s production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.
|
Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. Fang Company Direct Materials Purchases Budget For July, August, and September July August September Total Units to be produced
Direct materials per unit
Production needs
Desired ending inventory
Total needs
Less: Beginning inventory
Direct materials to be purchased
Cost per ounce $ 0.08 $ 0.08 $ 0.08 $ 0.08 Total purchase cost $ $ $ $
|
9.
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Exercise 9-34
Sales Budget
Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers) for the coming five quarters are as follows:
The vice president of sales believes that the projected sales are realistic and can be achieved by the company.
|
1. Prepare a sales budget for each quarter of 2012 and for the year in total. Show sales by product and in total for each time period. Do not include a multiplication symbol as part of your answer. Stillwater Designs Sales Budget For the Year Ended December 31, 2012 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Total S12L7: Units
Price $ $ $ $ $ Sales $ $ $ $ $ S12L5: Units
Price $ $ $ $ $ Sales $ $ $ $ $ Total sales $ $ $ $
|
2. How will Stillwater Designs use this sales budget?
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
_________________
