Birdfeeders Unlimited makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores. $15 Sales price per birdfeeder 1.5 Board feet of wood required for each birdfeeder $4 Cost per board foot (actual) 10% Desired ending wood inventory stated as a percentage of next month’s production requirements 20% Desired ending finished goods inventory (finished birdfeeders) stated as a percentage of next month’s sales $550,000 Total cost of direct materials purchases in December 45% of direct materials purchases are paid in the month of purchase 55% of direct materials purchases are paid in the month after purchase Prepare the direct materials purchases budget for the first three months of the year, as well as a summary budget for the quarter. Assume the company needs 120,000 board feet of wood for production in April.
Birdfeeders Unlimited makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores. $15 Sales price per birdfeeder 1.5 Board feet of wood required for each birdfeeder $4 Cost per board foot (actual) 10% Desired ending wood inventory stated as a percentage of next month’s production requirements 20% Desired ending finished goods inventory (finished birdfeeders) stated as a percentage of next month’s sales $550,000 Total cost of direct materials purchases in December 45% of direct materials purchases are paid in the month of purchase 55% of direct materials purchases are paid in the month after purchase Prepare the direct materials purchases budget for the first three months of the year, as well as a summary budget for the quarter. Assume the company needs 120,000 board feet of wood for production in April.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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| Birdfeeders Unlimited makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores. | ||||||||||
| $15 | Sales price per birdfeeder | |||||||||
| 1.5 | Board feet of wood required for each birdfeeder | |||||||||
| $4 | Cost per board foot (actual) | |||||||||
| 10% | Desired ending wood inventory stated as a percentage of next month’s production requirements | |||||||||
| 20% | Desired ending finished goods inventory (finished birdfeeders) stated as a percentage of next month’s sales | |||||||||
| $550,000 | Total cost of direct materials purchases in December | |||||||||
| 45% | of direct materials purchases are paid in the month of purchase | |||||||||
| 55% | of direct materials purchases are paid in the month after purchase |
Prepare the direct materials purchases budget for the first three months of the year, as well as a summary budget for the quarter. Assume the company needs 120,000 board feet of wood for production in April.
Transcribed Image Text:Units
October actual sales (prior year)
November actual sales (prior year)
December actual sales (prior year)
January projected sales
92,000
85,000
78,000
80,000
February projected sales
90,000
March projected sales
95,000
April projected sales
105,000
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