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Crest Products expects the following sales of its single product: Units 20,900 15,300 19,000 25,300 15,500 September October November December January Required: Crest has an ending finished goods inventory policy of 30% of the next month's sales needs. September 1 inventory is projected to be 5,200 units. Each finished unit requires 2 units of Component X and 3 units of Component Z. August 1 materials inventory includes 3,000 units of Component X and 173,000 units of Component Z. Crest desires to maintain a Component X inventory equal to 10% of next month's production needs and a Component Z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31. Crest Products Production Budget For the Quarter Ending December 31 October November Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory Budgeted production (units) December Total

Crest Products expects the following sales of its single product: Units 20,900 15,300 19,000 25,300 15,500 September October November December January Required: Crest has an ending finished goods inventory policy of 30% of the next month's sales needs. September 1 inventory is projected to be 5,200 units. Each finished unit requires 2 units of Component X and 3 units of Component Z. August 1 materials inventory includes 3,000 units of Component X and 173,000 units of Component Z. Crest desires to maintain a Component X inventory equal to 10% of next month's production needs and a Component Z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31. Crest Products Production Budget For the Quarter Ending December 31 October November Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory Budgeted production (units) December Total

FINANCIAL ACCOUNTING
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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b. Prepare a direct materials purchases budget for Component Z for quarter ending December 31. Assume a desired ending inventory for Component Z of 11,000 units at December 31, and a constant unit cost of $4 per lb. Crest Products Direct Materials Purchases Budget (Component Z) For the Quarter Ending December 31 October November Budgeted production (units) Direct materials requirements per unit Total direct material needed Plus: Ending inventory Less: Beginning inventory Total purchases of Component Z Cost of Component Z Budgeted cost of Component Z purchases (9,846) (12,534) December (13,416) $ Total 11,000 9,846 720,536
Transcribed Image Text:b. Prepare a direct materials purchases budget for Component Z for quarter ending December 31. Assume a desired ending inventory for Component Z of 11,000 units at December 31, and a constant unit cost of $4 per lb. Crest Products Direct Materials Purchases Budget (Component Z) For the Quarter Ending December 31 October November Budgeted production (units) Direct materials requirements per unit Total direct material needed Plus: Ending inventory Less: Beginning inventory Total purchases of Component Z Cost of Component Z Budgeted cost of Component Z purchases (9,846) (12,534) December (13,416) $ Total 11,000 9,846 720,536
Crest Products expects the following sales of its single product: September October November December January Required: Units 20,900 15,300 19,000 25,300 15,500 Crest has an ending finished goods inventory policy of 30% of the next month's sales needs. September 1 inventory is projected to be 5,200 units. Each finished unit requires 2 units of Component X and 3 units of Component Z. August 1 materials inventory includes 3,000 units of Component X and 173,000 units of Component Z. Crest desires to maintain a Component X inventory equal to 10% of next month's production needs and a Component Z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31. Crest Products Production Budget For the Quarter Ending December 31 October November Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory Budgeted production (units) December Total
Transcribed Image Text:Crest Products expects the following sales of its single product: September October November December January Required: Units 20,900 15,300 19,000 25,300 15,500 Crest has an ending finished goods inventory policy of 30% of the next month's sales needs. September 1 inventory is projected to be 5,200 units. Each finished unit requires 2 units of Component X and 3 units of Component Z. August 1 materials inventory includes 3,000 units of Component X and 173,000 units of Component Z. Crest desires to maintain a Component X inventory equal to 10% of next month's production needs and a Component Z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31. Crest Products Production Budget For the Quarter Ending December 31 October November Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory Budgeted production (units) December Total
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