138 Exercise 4-25 A sales budget for the first five months of 2021 is given on a certain product line manufactured by Boots Styles, Inc. Sales budget in units January February 157,000 162,000 March 204,000 April May 223,000 245,000 The inventory of finished products at the end of each month is equal to 20% of the sales estimate for the next month. This requirement is expected to be met by Jan. 1. No work is in process at the end of each month. Each unit of product requires two types of raw materials as follows: Material A ½ unit Material B 6 units The estimated cost of Material A is P5.00 per unit, and the estimated cost of Material B is PO.60 per unit. Materials equal to 30% of next month's production needs are to be on hand at the end of each month. This requirement is expected to be met on Jan. 1. REQUIRED: 1. Prepare a production budget for the first quarter of 2021 broken down by months. Include a total column.
138 Exercise 4-25 A sales budget for the first five months of 2021 is given on a certain product line manufactured by Boots Styles, Inc. Sales budget in units January February 157,000 162,000 March 204,000 April May 223,000 245,000 The inventory of finished products at the end of each month is equal to 20% of the sales estimate for the next month. This requirement is expected to be met by Jan. 1. No work is in process at the end of each month. Each unit of product requires two types of raw materials as follows: Material A ½ unit Material B 6 units The estimated cost of Material A is P5.00 per unit, and the estimated cost of Material B is PO.60 per unit. Materials equal to 30% of next month's production needs are to be on hand at the end of each month. This requirement is expected to be met on Jan. 1. REQUIRED: 1. Prepare a production budget for the first quarter of 2021 broken down by months. Include a total column.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
100%
Transcribed Image Text:138
Exercise 4-25
A sales budget for the first five months of 2021 is given on a certain
product line manufactured by Boots Styles, Inc.
Sales budget in units
January
February
March
157,000
162,000
204,000
Аpril
Мay
223,000
245,000
The inventory of finished products at the end of each month is equal to
20% of the sales estimate for the next month. This requirement is expected to
be met by Jan, 1. No work is in process at the end of each month.
Each unit of product requires two types of raw materials as follows:
Material A
½ unit
Material B
6 units
The estimated cost of Material A is P5.00 per unit, and the estimated cost
of Material B is PO.60 per unit. Materials equal to 30% of next month’s
production needs are to be on hand at the end of each month. This requirement
is expected to be met on Jan. 1.
REQUIRED:
1. Prepare a production budget for the first quarter of 2021 broken down by
months. Include a total column.
2. Prepare a purchases budget for each type of raw materials also for the first
quarter of 2021 broken down into months. Include a total colum.
Boots Style, Inc.
Production Budget
For the First Quarter of 2021
Extra
Jan.
Feb.
March
Total
Аpril
Sales budget
Add: Ending inventory (20%)
Total requirements
Less: Beginning inventory
Production budget
Transcribed Image Text:139
Boots Style, Inc.
Purchases Budyct- Material A
For the First Quarter of 2021
Jan.
Feb.
March
Total
Production budget
x No. of units required
Production requirements
Add: Ending inventory (30%)
Total requirements
Less: Beginning inventory
Purchases budget (units)
x Budgeted unit cost
Purchases budget (pesos)
1/2
1/2
1/2
Boots Style, Inc.
Purchases Budget- Material B
For the First Quarter of 2021
Jan.
Feb.
March
Total
Production budget
x No. of units required
Production requirements
Add: Ending inventory (30%)
Total requirements
Less: Beginning inventory
Purchases budget (units)
x Budgeted unit cost
Purchases budget (pesos)
6.
6.
6.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education