Donaldson Industries manufactures a popular interactive stuffed animal for children that requires four computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Donaldson Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: View the production schedule. Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Production schedule Donaldson Industries Direct Materials Budget For the Months of January through March January February March Quarter January.... Units to be produced 5,600 4,200 4,900 14,700 February 4 March Multiply by: Quantity of direct materials needed per unit Quantity needed for production 22,400 16,800 19,600 58,800 April 4,200 4,900 4,000 4,000 Plus: Desired ending inventory of direct materials Total quantity needed 26,600 21,700 23,600 62,800 4,200 4,900 Less: Beginning inventory of direct materials Quantity to purchase 17,500 18,700 Multiply by: Cost per unit Total cost of direct material purchases 1.00 $ 1.00 $ 1.00 $ 1.00 17,500 $ 18,700 Stuffed animals to be produced 5,600 4,200 4,900 4,000 Print Done - ☑
Donaldson Industries manufactures a popular interactive stuffed animal for children that requires four computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Donaldson Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: View the production schedule. Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Production schedule Donaldson Industries Direct Materials Budget For the Months of January through March January February March Quarter January.... Units to be produced 5,600 4,200 4,900 14,700 February 4 March Multiply by: Quantity of direct materials needed per unit Quantity needed for production 22,400 16,800 19,600 58,800 April 4,200 4,900 4,000 4,000 Plus: Desired ending inventory of direct materials Total quantity needed 26,600 21,700 23,600 62,800 4,200 4,900 Less: Beginning inventory of direct materials Quantity to purchase 17,500 18,700 Multiply by: Cost per unit Total cost of direct material purchases 1.00 $ 1.00 $ 1.00 $ 1.00 17,500 $ 18,700 Stuffed animals to be produced 5,600 4,200 4,900 4,000 Print Done - ☑
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 26E: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other...
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