1) Gertrude Products expects the following sales of its single product: Units July 6,000 August 6,500 September 7,200 October 7,800 November 8,800 Gertrude desires an
1) Gertrude Products expects the following sales of its single product:
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Units |
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July |
6,000 |
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August |
6,500 |
|
September |
7,200 |
|
October |
7,800 |
|
November |
8,800 |
Gertrude desires an ending finished goods inventory to be equal to 20% of the next month's sales needs. July 1 inventory is projected to be 1,000 units. Each unit requires 5 pounds of Chemical A and 14 pounds of Chemical B. July 1 materials inventory includes 10,600 pounds of Chemical A and 76,000 pounds of Chemical B. Gertrude desires to maintain a Chemical A inventory equal to 30% of next month's production needs and a Chemical B inventory equal to 100% of next month's production needs.
a Prepare a production budget for Gertrude for July, August and September.
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a. Production |
July |
August |
September |
Qtr. Total |
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Sales
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+Ending Inv.
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-Beginning Inv.
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Production
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b. Prepare a direct materials purchases budget for Chemical A, for the quarter.
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b. Chemical A |
July |
August |
September |
Qtr. Total |
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Production
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x 5 Pounds
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Chemical A needs |
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+ Ending Inv.
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