Blue Spruce Industries has budgeted the following unit sales: 2022 January 10,500 February 7,500 9.500 11,500 14,500 March Units April May The finished goods units on hand on December 31, 2021 was 2,100 units. Each unit of finished goods requires 2 pounds of direct materials that are estimated to cost an average of $6 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. The company also has a policy of maintaining a direct materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 5.940 pounds of direct materials on hand at December 31, 2021.
Blue Spruce Industries has budgeted the following unit sales: 2022 January 10,500 February 7,500 9.500 11,500 14,500 March Units April May The finished goods units on hand on December 31, 2021 was 2,100 units. Each unit of finished goods requires 2 pounds of direct materials that are estimated to cost an average of $6 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. The company also has a policy of maintaining a direct materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 5.940 pounds of direct materials on hand at December 31, 2021.
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.
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Transcribed Image Text:Blue Spruce Industries has budgeted the following unit sales:
2022
Units
January 10,500
February 7,500
March
9.500
April
May
11,500
14,500
The finished goods units on hand on December 31, 2021 was 2,100 units. Each unit of finished goods requires 2 pounds of direct
materials that are estimated to cost an average of $6 per pound. It is the company's policy to maintain a finished goods inventory at
the end of each month equal to 20% of next month's anticipated sales. The company also has a policy of maintaining a direct materials
inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 5,940
pounds of direct materials on hand at December 31, 2021.
Transcribed Image Text:For the first quarter of 2022, prepare a direct materials budget.
January
Direct Materials Budget
February
BLUE SPRUCEINDUSTRIES
Direct Materials Budget
January
March
February
Total
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