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Empire Chemical Company produces three products using three different continuous processes. The products are Yarex, Darol, and Norex. Projected sales in gallons for the three products for the years 20x2 and 20x3 are as follows: 20x2 20x3 Yarex 122,000 132,000 Darol 82,000 Norex 52,000 • Inventories are planned for each product so that the projected finished-goods inventory at the beginning of each year is equal to 7 percent of that year's projected sales. . Because of the continuous nature of Empire's processes, work-in-process inventory for each of the products remains constant throughout the year. •The raw material requirements of the three products are shown in the following chart Raw Material Ganna Murad 72,000 62,000 Islin Tarden Units pounds pounds gallons gallons Unit Price Yarex Darol Norex $ 8.00 0.4 8.6 8.6 1.2 0.9 0.5 6.00 5.00 10.00 8.7 0.7 0.7 • Raw-material inventories are planned so that each raw material's projected inventory at the beginning of a year is equal to 10 percent of the previous year's usage of that raw material. The conversion requirements in hours per gallon for the three products are Yarex, 0.06 hour; Darol, 0.09 hour, and Norex, 0.15 hour. The conversion cost of $15 per hour is considered 100 percent variable. Required: . Determine Empire Chemical Company's production budget (in gallons) for the three products for 20x2. 2. Determine Empire Chemical Company's conversion cost budget for 20x2. 3. Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for

Empire Chemical Company produces three products using three different continuous processes. The products are Yarex, Darol, and Norex. Projected sales in gallons for the three products for the years 20x2 and 20x3 are as follows: 20x2 20x3 Yarex 122,000 132,000 Darol 82,000 Norex 52,000 • Inventories are planned for each product so that the projected finished-goods inventory at the beginning of each year is equal to 7 percent of that year's projected sales. . Because of the continuous nature of Empire's processes, work-in-process inventory for each of the products remains constant throughout the year. •The raw material requirements of the three products are shown in the following chart Raw Material Ganna Murad 72,000 62,000 Islin Tarden Units pounds pounds gallons gallons Unit Price Yarex Darol Norex $ 8.00 0.4 8.6 8.6 1.2 0.9 0.5 6.00 5.00 10.00 8.7 0.7 0.7 • Raw-material inventories are planned so that each raw material's projected inventory at the beginning of a year is equal to 10 percent of the previous year's usage of that raw material. The conversion requirements in hours per gallon for the three products are Yarex, 0.06 hour; Darol, 0.09 hour, and Norex, 0.15 hour. The conversion cost of $15 per hour is considered 100 percent variable. Required: . Determine Empire Chemical Company's production budget (in gallons) for the three products for 20x2. 2. Determine Empire Chemical Company's conversion cost budget for 20x2. 3. Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem 9-38 Production and Materials Budgets (LO 9-3, 9-6, 9-7) Empire Chemical Company produces three products using three different continuous processes. The products are Yarex, Darol, and Norex. Projected sales in gallons for the three products for the years 20x2 and 20x3 are as follows: 20x2 20x3 Yarex 122,000 132,000 Darol 82,000 72,000 Norex 52,000 62,000 • Inventories are planned for each product so that the projected finished-goods inventory at the beginning of each year is equal to 7 percent of that year's projected sales. . Because of the continuous nature of Empire's processes, work-in-process inventory for each of the products remains constant throughout the year. The raw-material requirements of the three products are shown in the following chart. Raw Material Ganna Murad Islin Tarden Units pounds pounds gallons gallons Unit Price Yarex Darol Norex $ 8.00 8.6 0.4 0.6 1.2 0.9 0.5 6.00 5.00 10.00 0.7 0.7 0.7 • Raw material inventories are planned so that each raw material's projected inventory at the beginning of a year is equal to 10 percent of the previous year's usage of that raw material. The conversion requirements in hours per gallon for the three products are Yarex, 0.06 hour; Darol, 0.09 hour, and Norex, 0.15 hour. The conversion cost of $15 per hour is considered 100 percent variable. Required: 1. Determine Empire Chemical Company's production budget (in gallons) for the three products for 20x2. 2. Determine Empire Chemical Company's conversion cost budget for 20x2. 3. Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for
Transcribed Image Text:Problem 9-38 Production and Materials Budgets (LO 9-3, 9-6, 9-7) Empire Chemical Company produces three products using three different continuous processes. The products are Yarex, Darol, and Norex. Projected sales in gallons for the three products for the years 20x2 and 20x3 are as follows: 20x2 20x3 Yarex 122,000 132,000 Darol 82,000 72,000 Norex 52,000 62,000 • Inventories are planned for each product so that the projected finished-goods inventory at the beginning of each year is equal to 7 percent of that year's projected sales. . Because of the continuous nature of Empire's processes, work-in-process inventory for each of the products remains constant throughout the year. The raw-material requirements of the three products are shown in the following chart. Raw Material Ganna Murad Islin Tarden Units pounds pounds gallons gallons Unit Price Yarex Darol Norex $ 8.00 8.6 0.4 0.6 1.2 0.9 0.5 6.00 5.00 10.00 0.7 0.7 0.7 • Raw material inventories are planned so that each raw material's projected inventory at the beginning of a year is equal to 10 percent of the previous year's usage of that raw material. The conversion requirements in hours per gallon for the three products are Yarex, 0.06 hour; Darol, 0.09 hour, and Norex, 0.15 hour. The conversion cost of $15 per hour is considered 100 percent variable. Required: 1. Determine Empire Chemical Company's production budget (in gallons) for the three products for 20x2. 2. Determine Empire Chemical Company's conversion cost budget for 20x2. 3. Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for
Required: 1. Determine Empire Chemical Company's production budget (in gallons) for the three products for 20x2. 2. Determine Empire Chemical Company's conversion cost budget for 20x2. 3. Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for 20x2. 4-a. Assume that for 20x2 production, Empire Chemical Company could replace the raw material Islin with the raw material Philin. The usage of Philin would be the same as the usage of Islin. However, Philin would cost 20 percent more than Islin and would cut production times on all three products by 10 percent. Compare cost of using Philin over using Islin. 4-b. Which raw material should the management use for the 20x2 production? Complete this question by entering your answers in the tabs below. Req 1 Increase Decrease Net increase Reg 2 Show Transcribed Text Req 3 Assume that for 20x2 production, Empire Chemical Company could replace the raw material Islin with the raw material Philin. The usage of Philin would be the same as the usage of Islin. However, Philin would cost 20 percent more than Islin and would cut production times on all three products by 10 percent. Compare cost of using Philin over using Islin. Answer is complete but not entirely correct. in cost of raw material in conversion cost in production cost Req 1 Reg 2 Reg 4A <Req3 Required: 1. Determine Empire Chemical Company's production budget (in gallons) for the three products for 20x2. 2. Determine Empire Chemical Company's conversion cost budget for 20x2, 3. Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for 20x2. 4-a. Assume that for 20x2 production, Empire Chemical Company could replace the raw material Islin with the raw material Philin. The usage of Philin would be the same as the usage of Islin. However, Philin would cost 20 percent more than Islin and would cut $ 256,030 S 33,876 $ 222,154 production times on all three products by 10 percent. Compare cost of using Philin over using Islin. 4-b. Which raw material should the management use for the 20x2 production? $ 1,280,150 O Complete this question by entering your answers in the tabs below. Req 48 Reg 4A Answer is complete but not entirely correct. Req 3 Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for 20x2. Purchases budget (Reg 2 Req 48 > Req 48 Req 4A >
Transcribed Image Text:Required: 1. Determine Empire Chemical Company's production budget (in gallons) for the three products for 20x2. 2. Determine Empire Chemical Company's conversion cost budget for 20x2. 3. Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for 20x2. 4-a. Assume that for 20x2 production, Empire Chemical Company could replace the raw material Islin with the raw material Philin. The usage of Philin would be the same as the usage of Islin. However, Philin would cost 20 percent more than Islin and would cut production times on all three products by 10 percent. Compare cost of using Philin over using Islin. 4-b. Which raw material should the management use for the 20x2 production? Complete this question by entering your answers in the tabs below. Req 1 Increase Decrease Net increase Reg 2 Show Transcribed Text Req 3 Assume that for 20x2 production, Empire Chemical Company could replace the raw material Islin with the raw material Philin. The usage of Philin would be the same as the usage of Islin. However, Philin would cost 20 percent more than Islin and would cut production times on all three products by 10 percent. Compare cost of using Philin over using Islin. Answer is complete but not entirely correct. in cost of raw material in conversion cost in production cost Req 1 Reg 2 Reg 4A <Req3 Required: 1. Determine Empire Chemical Company's production budget (in gallons) for the three products for 20x2. 2. Determine Empire Chemical Company's conversion cost budget for 20x2, 3. Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for 20x2. 4-a. Assume that for 20x2 production, Empire Chemical Company could replace the raw material Islin with the raw material Philin. The usage of Philin would be the same as the usage of Islin. However, Philin would cost 20 percent more than Islin and would cut $ 256,030 S 33,876 $ 222,154 production times on all three products by 10 percent. Compare cost of using Philin over using Islin. 4-b. Which raw material should the management use for the 20x2 production? $ 1,280,150 O Complete this question by entering your answers in the tabs below. Req 48 Reg 4A Answer is complete but not entirely correct. Req 3 Assuming the 20x1 usage of Islin is 270,000 gallons, determine the company's raw-material purchases budget (in dollars) for Islin for 20x2. Purchases budget (Reg 2 Req 48 > Req 48 Req 4A >
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