Cash is running low, and Patience is working against the clock to purchase DM for the final month's production push. Each unit requires 7 pounds of material, with each pound costing $0.40. The company's target ending inventory for DM is 20% of the next month's production needs, and it expects to hold just that amount of inventory on November 30. Planned production in December and January is expected to be 1,000 units and 1,200 units, respectively. Prepare the DM purchases budget for December, determining both the quantity to be purchased and the total cost of purchases for the company. (Round DM cost per unit to 2 decimal places, e.g. 15.25.) December

Cash is running low, and Patience is working against the clock to purchase DM for the final month's production push. Each unit requires 7 pounds of material, with each pound costing $0.40. The company's target ending inventory for DM is 20% of the next month's production needs, and it expects to hold just that amount of inventory on November 30. Planned production in December and January is expected to be 1,000 units and 1,200 units, respectively. Prepare the DM purchases budget for December, determining both the quantity to be purchased and the total cost of purchases for the company. (Round DM cost per unit to 2 decimal places, e.g. 15.25.) December

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Suppose plant capacity were only 13,000 pieces instead of 15,000 pieces each month. Thespecial order must either be taken in full or be rejected completely. Should Carilla accept thespecial order? Show your calculations
Garza Electronics expects to sell 500 units in January, 250 units in February, and 1,000 units in March. January's beginning inventory is 700 units. Expected sales for the whole year are 7,200 units. Garza has decided on a level monthly production schedule of 600 units (7,200 units/12 months = 600 units per month). What is the expected end- of-month inventory for January, February, and March?
Labor costs per hour and the other costs are not expected to change during the year. However, the cotton cost per yard will increase by 20% at the start of the coming budget period. The current inventory of blue rugs is 60,000 units and management would like to see an increase of inventory to 105,000 units. Production will occur evenly throughout the year. Inventory levels for c aining Time: 2 hours, 49 minutes, 34 seconds. stion Completion Status: 2 3. 4 5. 17 8. 6. 10 11 12 13 14 15 16 17 18 19 20 21 Xander Manufacturing Company manufactures blue rugs. The company needs to prepare a budget for the coming year. The following costs and other data apply to rug production: Direct materials per rug 1.0 yard cotton at $3 per yard 0.2 yards canvas finish at $10 per yard Direct labor per rug: 0.5 hour at S16 per hour Overhead per rug Indirect labor Indirect materials per $0.5 0.15 Power 0.3 Machine costs 1.25 Lease costs 0.8 Total overhead per unit $3.0 Bixed costs include the machine costs…
The Company has two products: A and B. March sales forecast projects 15,000 units of A and 10,000 units of B are going to be sold at prices of $15 and $18, respectively. The desired ending inventory of A is 12% higher than the beginning inventory, which was 2000 units. How much are total March sales for A anticipated to be?
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $460,000 for November, $440,000 for December, and $430,000 for January. Collections are expected to be 45% in the month of sale and 55% in the month following the sale. The cost of goods sold is 80% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $25,200. Monthly depreciation is $16,200. Ignore taxes. Balance SheetOctober 31 Assets Cash $ 20,000 Accounts receivable 70,000 Merchandise inventory 153,000 Property, plant and equipment, net of $572,000 accumulated depreciation 1,094,000 Total assets $ 1,337,000 Liabilities and Stockholders' Equity Accounts payable $ 254,000 Common stock 820,000 Retained earnings…
I need some help with this problem
Sunland Company estimates its sales at 180000 units in the first quarter and that sales will increase by 17000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at O $5273500. O $3026500. O $4387000. O $6057389.
ed GreenThumb Organic Fertilizer Company plans to sell 210,000 units of finished product in July and anticipates a growth rate in sales of 3 percent per month. The desired monthly ending inventory in units of finished product is 90 percent of the next month's estimated sales. There are 189,000 finished units in inventory on June 30. Each unit of finished product requires 5 pounds of raw material at a cost of $1.35 per pound. There are 750,000 pounds of raw material in inventory on June 30. Required: 1. Compute the company's total required production in units of finished product for the entire three-month period ending September 30. Note: Round all intermediate calculations and your final answer to the nearest unit. 2. Independent of your answer to requirement 1, assume the company plans to produce 680,000 units of finished product in the three- month period ending September 30, and to have raw-material inventory on hand at the end of the three-month period equal to 25 percent of the…
XYZ Company prices its products by adding 30% to its cost. XYZ anticipates sales of $715,000 in March, $728,000 in April, and $624,000 in May. XYZ’s policy is to have on hand enough inventories at the end of the month to cover 25% of the next month’s sales. What will be the cost of the inventory that ABC should budget for purchases in April? Solution: Cost of Inventory = Sales price/1.3 March cost of inventory $715,000/1.3 $550,000 April cost of inventory $728,000/1.3 $560,000 May cost of inventory $624,000/1.3 $480,000 Ending Inventory = Beginning inventory + purchases – cost of goods sold (cogs) April ending inventory $480,000 x 25% $120,000 Beginning inventory $560,000 x 25% $140,000 $120,000 = $140,000 + purchases – cost of goods sold (cogs)
3) Ehrlich Manufacturing Corporation manufactures and sells wooden puzzles. Expected puzzle sales at Ehrlich (in units) for the next three months are as follows: January February March budgeted unit sales: 27,000 25,000 30,000 Ehrlich likes to maintain a finished goods inventory equal to 30% of the next month's estimated sales. How many puzzles should Ehrlich plan on producing during the month of February? Show your calculations.
Customers at furniture store demand an average of 6,000 bookcases per year. Each time an order is placed, an ordering cost of $300 is incurred. The annual holding cost for a single desk is 25% of the $200 cost of a bookcase. Assume that the lead time to receive an order is one week. a) Each time an order is placed, how many bookcases should be ordered? b) What is the cycle time, T? c) How many orders should be placed each year? d) Determine the total annual costs of meeting the customers' demands for bookcases.
TRIUMPHANT Company manufactures wood chairs that sell for USD25 each. Each chair requires 4 linear feet of wood, which costs USD2.00 per foot. Each chair takes approximately 30 minutes to build, and the labor rate averages USD12.00 per hour. TRIUMPHANT has the following inventory policies: Ending finished goods inventory should be 40 percent of next month's sales. Ending direct materials inventory should be 30 percent of next month's production. Expected unit sales (chair) for the upcoming months follow: June 225 July 275 August 350 September 400 October 375 November 425 Variable manufacturing overhead is incurred at a rate of USDO,30 per unit produced. Annual fixed manufacturing overhead is estimated to be USD7,200 uction of 4,000 units for the year. Selling and administrative expenses are estimated at USD650 per month plus (USD600 per month) for expected USDO.60 per unit sold. Compute the budgeted direct materials purchases in dollars for the month of August.