Blossom Company's sales budget projects unit sales of part 1987 of 10,700 units in January, 12,200 units in February, and 13,000 units in March. Each unit of part 1987 requires 3 pounds of materials, which cost $4 per pound. Blossom Company desires its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2019. (a) Prepare a production budget for January and February 2020. 4: 7:1 BLOSSOM COMPANY Production Budget January February

Blossom Company's sales budget projects unit sales of part 1987 of 10,700 units in January, 12,200 units in February, and 13,000 units in March. Each unit of part 1987 requires 3 pounds of materials, which cost $4 per pound. Blossom Company desires its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2019. (a) Prepare a production budget for January and February 2020. 4: 7:1 BLOSSOM COMPANY Production Budget January February

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Aaron's Chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were as follows. Materials cost = $4,680 Labor cost = $2,630 Rent = $1,500 Depreciation = $2,500 Other fixed costs = $3,200 Materials and labor are the only variable costs. If production and sales are budgeted to change to 130 chairs in August, how much is the expected total variable cost on the August budget?