Give true solution Cahuilla Corporation predicts the following sales in units for the comingfour months:April May June JulySales in Units 240 280 300 240Each month's ending Finished Goods inventory should be 40% of the nextmonth's sales March 31 Finished Goods inventory is 96 units. A finishedunit requires five pounds of direct material B. The March 31 RawMaterials inventory has 200 pounds of B. Each month's ending RawMaterials inventory should be 30% of the following month's productionneeds. The budgeted purchases of pounds of direct material B duringMay should be:A. 1,422 lbs.B. 288 lbs.C. 1,854 lbs.D. 276 lbs.E. 1,008 lbs.

Step 1: Define Inventory for a FirmThe inventory for a firm may be categorized into raw materials…

Answered: Cahuilla Corporation predicts the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 14PA: Total Pops data show the following information: New machinery will be added in April. This machine...

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Rehydrator makes a nutrition additive and expects to sell 3,000 units in January, 2,000 in February, 2,500 in March, 2,700 in April. and 2,900 in May. The required ending inventory is 20% of the next months sales, and the beginning inventory on January 1 was 600 units. Prepare a production budget for the first four months of the year.
If the sales forecast estimates that 50,000 units of product will be sold during the following year, should the factory plan on manufacturing 50,000 units in the coming year? Explain.
Palmgren Company produces consumer products. The sales budget for four months of the year is presented below. Company policy requires that ending inventories for each month be 25 percent of next months sales. At the beginning of July, the beginning inventory of consumer products met that policy. Required: Prepare a production budget for the third quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total.
Total Pops data show the following information: New machinery will be added in April. This machine will reduce the labor required per unit and increase the labor rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next months requirements. Direct material requires 2 pounds per unit at a cost of $3 per pound. The ending inventory required for direct materials is 15% of the next months needs. In January, the beginning inventory is 3,000 units of finished goods and 4,470 pounds of material. Prepare a production budget, direct materials budget, and direct labor budget for the first quarter of the year.
Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
Pietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Required: 1. Prepare a statement of cost of goods sold in good form. 2. What if the beginning inventory of finished goods decreased by 5,000? What would be the effect on the cost of goods sold?
Refer to Cornerstone Exercises 2.2 and 2.3. Next year, Pietro expects to produce 50,000 units and sell 49,300 units at a price of 12.50 each. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Total selling expense is projected at 26,000, and total administrative expense is projected at 134,000. Required: 1. Prepare an income statement in good form. Be sure to include the percent of sales column. 2. What if the cost of goods sold percentage for the past few years was 65 percent? Explain how management might react.
Cahuilla Corporation predicts the following sales in units for the coming four months: April May June July Sales in units 330 370 390 330 Each month's ending finished goods inventory should be 30% of the next month's sales. March 31 finished goods inventory is 99 units. A finished unit requires five pounds of direct material B at a cost of $3.00 per pound. The March 31 Raw Materials Inventory has 290 pounds of B. Each month's ending Raw Materials Inventory should be 20% of the following month's production needs. The budgeted production for May is:
Cahuilla Corporation predicts the following sales in units for the coming four months: April May June July Sales in units 240 280 300 240 Each month's ending Finished Goods Inventory should be 40% of the next month's sales. March 31 finished goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted production for May is: Select one: a. 288 units. b. 400 units. c. 232 units. d. 280 units. e. 168 units. Clear my choice
Cahuilla Corporation predicts the following sales in units for the coming four months: April May June July Sales in units 240 240 280 300 240 Each month's ending Finished Goods Inventory in units should be 40% of the next month's sales. March 31 Finished Goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of direct material B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted cost of direct material B during May should be:
Cahuilla Corporation predicts the following sales in units for the coming four months: April May June July Sales in units 280 320 340 280 Each month's ending Finished Goods Inventory in units should be 40% of the next month's sales. March 31 Finished Goods inventory is 112 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 240 pounds of direct material B. Each month's during May ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted purchases of pounds of direct material should be:
Croy Inc. has the following projected sales for the next five months: Month Salen in Unita 3,850 3,875 4, 260 4,135 3,590 April May June July August Croy's finished goods inventory policy is to have 60 percent of the next month's sales on hand at the end of each month, Direct materials cost $3.10 per pound, and each unit requires 2 pounds. Direct materials inventory policy is to have 50 percent of the next month's production needs on hand at the end of each month. Direct materials on hand at March 31 totaled 3,865 pounds. Required: 1. Determine budgeted production for April, May, and June. 2. Determine budgeted cost of materials purchased for April and May.

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