b. Prepare a forecast of the units and cost of raw material that will be required for February, March, and April. The expected cost per pound of raw material is expected to be $2 in February, $2.30 in March, and $2.40 in April. Required raw material units Cost of raw material purchases $ Units produced DLHS per unit Total hours Cost per DLH Cost of DL February $ $ 0 0 0 0 $ 0 $ 0 0 $ c. Prepare a direct labor budget (assuming a $12 per hour rate) for February, March, and April. February March March 0 0 0 0 $ 0 $ April 0 0 $ 0 0 0 0 0 April 0 0
b. Prepare a forecast of the units and cost of raw material that will be required for February, March, and April. The expected cost per pound of raw material is expected to be $2 in February, $2.30 in March, and $2.40 in April. Required raw material units Cost of raw material purchases $ Units produced DLHS per unit Total hours Cost per DLH Cost of DL February $ $ 0 0 0 0 $ 0 $ 0 0 $ c. Prepare a direct labor budget (assuming a $12 per hour rate) for February, March, and April. February March March 0 0 0 0 $ 0 $ April 0 0 $ 0 0 0 0 0 April 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:b. Prepare a forecast of the units and cost of raw material that
will be required for February, March, and April. The expected cost
per pound of raw material is expected to be $2 in February, $2.30
in March, and $2.40 in April.
Required raw material units
Cost of raw material purchases $
Units produced
DLHS per unit
Total hours
Cost per DLH
Cost of DL
February
$
$
0
0
0
0
$
0 $
0
0 $
c. Prepare a direct labor budget (assuming a $12 per hour rate)
for February, March, and April.
February
March
March
0
0
0
0 $
0 $
April
0
0 $
0
0
0
0
0
April
0
0

Transcribed Image Text:Production, direct materials, and direct labor budgets
Gerrad Manufacturing has projected sales of its product for the
next six months as follows:
January 180 units
February 420 units
March 600 units
April
540 units
May
240 units
June 180 units
The finished product requires 3 pounds of raw material and 10
hours of direct labor.
Gerrad tries to maintain a Finished Goods ending inventory
equal to the next two months of sales and a Raw Material ending
inventory equal to one-half of the current month's production
needs. January's beginning inventories are expected to conform
to company policy.
a. Prepare a production budget for February, March, and April.
Note: Use a negative sign in your schedule to indicate that an
amount is subtracted.
Sales
EI
Total units needed
BI
Units produced
February
0
0
0
0
0
March
0
0
0
0
0
April
0
0
0
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