Bonita Company's sales budget projects unit sales of part 1982 of 9,000 units in January, 10,600 units in February, and 11,900 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Bonita 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, 2021. (a) Prepare a production budget for January and February 2022. BONITA COMPANY Production Budget Desired Ending Finished Goods Inventory V January February
Bonita Company's sales budget projects unit sales of part 1982 of 9,000 units in January, 10,600 units in February, and 11,900 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Bonita 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, 2021. (a) Prepare a production budget for January and February 2022. BONITA COMPANY Production Budget Desired Ending Finished Goods Inventory V January February
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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
List of accounts
Desired Pounds in Ending Materials Inventory
Cost Per Pound
Beginning Finished Goods Inventory
Desired Ending Finished Goods Inventory
Direct Materials Purchases
Total Materials Required
Total Required Units
Expected Unit Sales
Total Pounds Needed for Production
Required Production Units
Total Cost of Direct Materials Purchases
Beginning Direct Materials (Pounds)
Units To Be Produced
Direct Material Pounds Per Unit
Transcribed Image Text:Bonita Company's sales budget projects unit sales of part 1982 of 9,000 units in January, 10,600 units in February, and 11,900 units in
March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Bonita 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, 2021.
(a)
Prepare a production budget for January and February 2022.
C
BONITA COMPANY
Production Budget
Desired Ending Finished Goods Inventory
January
February
Transcribed Image Text:(b)
Prepare a direct materials budget for January 2022.
:
BONITA COMPANY
Direct Materials Budget
$
$
January
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