Dear Bartleby,could you please provide assistance with preparing a materials purchase budget, thank you, as indicated after this. d. Prepare a materials purchases budget in pounds, by month and in total, for the second quarter of 2019. Soprano Co. is in the process of preparing the second quarter budget for 2019, and the following data have been assembled: The company sells a single product at a selling price of $40 per unit. The estimated sales volume for the next six months is as follows: March 6,000 units June 8,000 units April 7,000 units July 9,000 units May 10,000 units August 6,000 units All sales are on account. The company's collection experience has been that 40% of a month's sales are collected in the month of sale, 55% are collected in the month following the sale, and 5% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $132,000 on March 31, 2019. Management's policy is to maintain ending finished goods inventory each month at a level equal to 50% of the next month's budgeted sales. The finished goods inventory on March 31, 2019, is expected to be 3,500 units. To make one unit of finished product, three pounds of materials are required. Management's policy is to have enough materials on hand at the end of each month to equal 40% of the next month's estimated usage. The raw materials inventory is expected to be 10,200 pounds on March 31, 2019. The cost per pound of raw material is $6.00, and 80% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable balance for raw material purchases is expected to be $26,280 on March 31, 2019.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

100%

Dear Bartleby,could you please provide assistance with preparing a materials purchase budget, thank you, as indicated after this. d. Prepare a materials purchases budget in pounds, by month and in total, for the second quarter of 2019.

Soprano Co. is in the process of preparing the second quarter budget for 2019, and the following data have been assembled:

The company sells a single product at a selling price of $40 per unit. The estimated sales volume for the next six months is as follows:

March 6,000 units June 8,000 units

April 7,000 units July 9,000 units

May 10,000 units August 6,000 units

All sales are on account. The company's collection experience has been that 40% of a month's sales are collected in the month of sale, 55% are collected in the month following the sale, and 5% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be $132,000 on March 31, 2019.
Management's policy is to maintain ending finished goods inventory each month at a level equal to 50% of the next month's budgeted sales. The finished goods inventory on March 31, 2019, is expected to be 3,500 units.
To make one unit of finished product, three pounds of materials are required. Management's policy is to have enough materials on hand at the end of each month to equal 40% of the next month's estimated usage. The raw materials inventory is expected to be 10,200 pounds on March 31, 2019.
The cost per pound of raw material is $6.00, and 80% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable balance for raw material purchases is expected to be $26,280 on March 31, 2019.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions