a. Prepare the production budget for Hancock Manufacturing, Inc., for the third quarter of 2016. Hancock Manufacturing, Inc. Production Budget For the Quarter Ended September 30, 2016 Forecast unit sales Desired ending inventory Quantity to be available Beginning inventory Total production to be scheduled
a. Prepare the production budget for Hancock Manufacturing, Inc., for the third quarter of 2016. Hancock Manufacturing, Inc. Production Budget For the Quarter Ended September 30, 2016 Forecast unit sales Desired ending inventory Quantity to be available Beginning inventory Total production to be scheduled
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.
Question
Oo.25.
Subject :- Account
Transcribed Image Text:Budgeting Production and Purchases and Just-In-Time Materials Inventory
Hancock Manufacturing, Inc. is preparing budgets for the third quarter of 2016. Hancock produces only one product in its factory. This product requires 5 pounds of material B, 2 pounds of
material G, and a component, K, that is purchased from another manufacturer. Hancock operates on a just-in-time basis for material B. As a result, Hancock maintains no inventory of material B.
On July 1, 2016, the inventory of material G is expected to be 3,000 pounds and the inventory of component K is expected to be 1,500 units. Hancock wants the inventories of G and K at
September 30, 2016, to be 20% less than the inventories at July 1, 2016. The inventory of finished products at June 30, 2016, is expected to be 2,000 units; the desired inventory at September 30,
2016, is 4,000 units to allow a buildup for heavy sales in the fourth quarter. The sales forecast for the third quarter is 13,000 units at $300 each. Budgeted purchase costs are $10 per pound for B,
$7 per pound for G, and $40 per component for K.
Do not use negative signs with any of your answers below.
a. Prepare the production budget for Hancock Manufacturing, Inc., for the third quarter of 2016.
Hancock Manufacturing, Inc.
Production Budget
For the Quarter Ended September 30, 2016
Forecast unit sales
Desired ending inventory
Quantity to be available
Beginning inventory
Total production to be scheduled
Transcribed Image Text:b. Prepare the direct material budget for Hancock Manufacturing, Inc., for the third quarter of 2016.
Hancock Manufacturing, Inc.
Direct Material Budget
For the Quarter Ended September 30, 2016
Material B
Material G
Scheduled production
Direct material required
Desired ending inventories
Total to be available
Beginning inventory
Total units of material to be purchased
Unit purchase price
Total material purchases
X
X $
$
X
X $
$
Component K
X
X $
$
LA
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