Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales Required production of lights Number of bulbs per light Total production needs-bulbs First Quarter 25,100 Each light requires two separate LED bulbs, each of which costs $2. To ensure enough LED bulbs are on hand to support short-term production if a problem arises with the sole supplier, Fortin Limited maintains an ending inventory of 10% of the following quarter's production needs. A total of 5,400 LED bulbs will be on hand to start the first quarter of the upcoming fiscal year. Total needs-bulbs Second Quarter Third Quarter 21,600 20,500 Required: Prepare a direct materials purchases budget for LED bulbs, by quarter and in total, for the upcoming fiscal year. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Required purchases-bulbs Total cost of purchases FORTIN LIMITED Direct Materials Budget-Year 2 Fourth Quarter 21,700 First Second Quarter Third Fourth Year
Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales Required production of lights Number of bulbs per light Total production needs-bulbs First Quarter 25,100 Each light requires two separate LED bulbs, each of which costs $2. To ensure enough LED bulbs are on hand to support short-term production if a problem arises with the sole supplier, Fortin Limited maintains an ending inventory of 10% of the following quarter's production needs. A total of 5,400 LED bulbs will be on hand to start the first quarter of the upcoming fiscal year. Total needs-bulbs Second Quarter Third Quarter 21,600 20,500 Required: Prepare a direct materials purchases budget for LED bulbs, by quarter and in total, for the upcoming fiscal year. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Required purchases-bulbs Total cost of purchases FORTIN LIMITED Direct Materials Budget-Year 2 Fourth Quarter 21,700 First Second Quarter Third Fourth Year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited
has developed the following estimates for unit sales in the upcoming year.
Budgeted unit sales
Required production of lights
Number of bulbs per light
Total production needs-bulbs
First
Quarter
25,100
Each light requires two separate LED bulbs, each of which costs $2. To ensure enough LED bulbs are on hand to support short-term
production if a problem arises with the sole supplier, Fortin Limited maintains an ending inventory of 10% of the following quarter's
production needs. A total of 5,400 LED bulbs will be on hand to start the first quarter of the upcoming fiscal year.
Total needs-bulbs
Second
Quarter
Third
Quarter
21,600 20,500
Required:
Prepare a direct materials purchases budget for LED bulbs, by quarter and in total, for the upcoming fiscal year. At the bottom of your
budget, show the dollar amount of purchases for each quarter and for the year in total.
Required purchases-bulbs
Total cost of purchases
FORTIN LIMITED
Direct Materials Budget-Year 2
Fourth
Quarter
21,700
First
Second
Quarter
Third
Fourth
Year
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