Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows: February- 14,000 units March- 15,500 units April- 11,900 units May- 12,600 units June- 14,500 units The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget. The total needs (i.e., production requirements plus desired ending inventory) of Material A for the month of May are: Select one: a. 37,800 yards b. 45,360 yards c. 46,500 yards d. 38,940 yards
Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows: February- 14,000 units March- 15,500 units April- 11,900 units May- 12,600 units June- 14,500 units The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget. The total needs (i.e., production requirements plus desired ending inventory) of Material A for the month of May are: Select one: a. 37,800 yards b. 45,360 yards c. 46,500 yards d. 38,940 yards
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows:
February- 14,000 units
March- 15,500 units
April- 11,900 units
May- 12,600 units
June- 14,500 units
The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget.
The total needs (i.e., production requirements plus desired ending inventory) of Material A for the month of May are:
The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget.
The total needs (i.e., production requirements plus desired ending inventory) of Material A for the month of May are:
Select one:
a.
37,800 yards
b.
45,360 yards
c.
46,500 yards
d.
38,940 yards
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