2. Brothers Inc. manufactures fidget spinner toy, Management is now preparing detailed budgets for the third quarter, and has assembled the following information to assist in preparing the budget: July 12,000 October Sales (in units) 9,000 a. The finished goods inventory on hand at the end of each month must be equal to 10% of the next month's sales. The inventory of finished goods on hand on June 30 is budgeted to be 2,400 units. August 15,000 September 10,000 b. Each fidget spinner requires 3 pounds of P3 material. The company would like the inventory of P3 material on hand at the end of each month to be equal to 25% of the following month's production needs. The inventory of P3 material on hand on June 30 is budgeted to be 21,525 pounds and inventory on hand on September 30 is budgeted to be 15,400 pounds. Required: 1. Prepare a production budget for fidget spinner, by month and in total. | 2. Prepare direct material budget for fidget spinner, by month and in total.
2. Brothers Inc. manufactures fidget spinner toy, Management is now preparing detailed budgets for the third quarter, and has assembled the following information to assist in preparing the budget: July 12,000 October Sales (in units) 9,000 a. The finished goods inventory on hand at the end of each month must be equal to 10% of the next month's sales. The inventory of finished goods on hand on June 30 is budgeted to be 2,400 units. August 15,000 September 10,000 b. Each fidget spinner requires 3 pounds of P3 material. The company would like the inventory of P3 material on hand at the end of each month to be equal to 25% of the following month's production needs. The inventory of P3 material on hand on June 30 is budgeted to be 21,525 pounds and inventory on hand on September 30 is budgeted to be 15,400 pounds. Required: 1. Prepare a production budget for fidget spinner, by month and in total. | 2. Prepare direct material budget for fidget spinner, by month and in total.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:2. Brothers Inc. manufactures fidget spinner toy, Management is now preparing
detailed budgets for the third quarter, and has assembled the following information
to assist in preparing the budget:
July
12,000
August
15,000
September
10,000
October
9,000
Sales (in units)
a. The finished goods inventory on hand at the end of each month must be equal
to 10% of the next month's sales. The inventory of finished goods on hand on
June 30 is budgeted to be 2,400 units.
b. Each fidget spinner requires 3 pounds of P3 material. The company would like
the inventory of P3 material on hand at the end of each month to be equal to
25% of the following month's production needs. The inventory of P3 material on
hand on June 30 is budgeted to be 21,525 pounds and inventory on hand on
September 30 is budgeted to be 15,400 pounds.
Required:
1. Prepare a production budget for fidget spinner, by month and in total. |
2. Prepare direct material budget for fidget spinner, by month and in total.
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