Furniture, Inc. makes and sells a single product called a Bik. The company wants to prepare the direct material budget for the quarter ending June 30. Budgeted production of Biks for the next six months is as follows: February 14,000 Units March 15,500 Units April 11.900 Units May 12.600 Units June 14.500 Units July 16.000 Units It takes three yards of Material A to make one Bik. The company wants to maintain monthly ending inventory of Material A equal to 20% of the following month's production needs On March 31, 2,000 yards of Material A were on hand. The cost of Material A is $5 per yard. Required: 1. Prepare the Direct Materials Budget for April, May, June, and quarter. 2. Based on the direct material budget that you prepared in requirement 1 above and assume that the direct materials purchase in February was $150,000 and in March was $160,000 Prepare the cash disbursements budget for April if the company policy for paying purchases is as follows: - 10% in the month of purchase. 50% one month after purchase. 40% two months after purchaser. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).

Furniture, Inc. makes and sells a single product called a Bik. The company wants to prepare the direct material budget for the quarter ending June 30. Budgeted production of Biks for the next six months is as follows: February 14,000 Units March 15,500 Units April 11.900 Units May 12.600 Units June 14.500 Units July 16.000 Units It takes three yards of Material A to make one Bik. The company wants to maintain monthly ending inventory of Material A equal to 20% of the following month's production needs On March 31, 2,000 yards of Material A were on hand. The cost of Material A is $5 per yard. Required: 1. Prepare the Direct Materials Budget for April, May, June, and quarter. 2. Based on the direct material budget that you prepared in requirement 1 above and assume that the direct materials purchase in February was $150,000 and in March was $160,000 Prepare the cash disbursements budget for April if the company policy for paying purchases is as follows: - 10% in the month of purchase. 50% one month after purchase. 40% two months after purchaser. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).

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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