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Gertrude Products expects the following sales of its single product: Units June 6,280 July 6,780 August 7,480 September 8,080 October 9,080 Required Gertrude has an ending finished goods inventory policy of 10% of the next month's sales needs. Each unit requires 5 pounds of Chemical A and 14 pounds of Chemical B. July 1 materials inventory includes 8,600 pounds of Chemical A and 76,000 pounds of Chemical B. Gertrude desires to maintain a Chemical A inventory equal to 20% of next month's production needs and a Chemical B inventory equal to 100% of next month's production needs. a. Prepare a production budget for Gertrude Products for the quarter ending September 30. Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory Budgeted production (units) Gertrude Products Production Budget For the Quarter Ending September 30 July 6,780 748 August September Total 7,480 8,080 22,340 808 908 908 748 808 808 7,540 8,180 22,620 b. Prepare a direct materials purchases budget for Chemical A for the quarter ending September 30. Assume a desired ending inventory for Chemical A of 9,100 pounds at September 30, and a constant unit cost of $2.70 per pound Note: Deductible answers must be indicated with a minus sign. Gertrude Products Direct Materials Purchases Budget (Chemical A) For the Quarter Ending September 30 July Budgeted production (units) Direct materials requirements per unit Total direct material needed August 7,540 September 8,180 Total 5 pounds 5 pounds Plus: Ending inventory 7,540 37,700 8,180 5 pounds 40,900 9,100 5 pounds Less: Beginning inventory Total purchases of Chemical A 34,940 38,340 41,820 Cost of Chemical A (per pound) 2.70 2.70 2.70 2.70 Budgeted cost of Chemical A purchases $ 103,518 112,914

Gertrude Products expects the following sales of its single product: Units June 6,280 July 6,780 August 7,480 September 8,080 October 9,080 Required Gertrude has an ending finished goods inventory policy of 10% of the next month's sales needs. Each unit requires 5 pounds of Chemical A and 14 pounds of Chemical B. July 1 materials inventory includes 8,600 pounds of Chemical A and 76,000 pounds of Chemical B. Gertrude desires to maintain a Chemical A inventory equal to 20% of next month's production needs and a Chemical B inventory equal to 100% of next month's production needs. a. Prepare a production budget for Gertrude Products for the quarter ending September 30. Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory Budgeted production (units) Gertrude Products Production Budget For the Quarter Ending September 30 July 6,780 748 August September Total 7,480 8,080 22,340 808 908 908 748 808 808 7,540 8,180 22,620 b. Prepare a direct materials purchases budget for Chemical A for the quarter ending September 30. Assume a desired ending inventory for Chemical A of 9,100 pounds at September 30, and a constant unit cost of $2.70 per pound Note: Deductible answers must be indicated with a minus sign. Gertrude Products Direct Materials Purchases Budget (Chemical A) For the Quarter Ending September 30 July Budgeted production (units) Direct materials requirements per unit Total direct material needed August 7,540 September 8,180 Total 5 pounds 5 pounds Plus: Ending inventory 7,540 37,700 8,180 5 pounds 40,900 9,100 5 pounds Less: Beginning inventory Total purchases of Chemical A 34,940 38,340 41,820 Cost of Chemical A (per pound) 2.70 2.70 2.70 2.70 Budgeted cost of Chemical A purchases $ 103,518 112,914

FINANCIAL ACCOUNTING
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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Gertrude Products expects the following sales of its single product: Units June 6,280 July 6,780 August 7,480 September 8,080 October 9,080 Required Gertrude has an ending finished goods inventory policy of 10% of the next month's sales needs. Each unit requires 5 pounds of Chemical A and 14 pounds of Chemical B. July 1 materials inventory includes 8,600 pounds of Chemical A and 76,000 pounds of Chemical B. Gertrude desires to maintain a Chemical A inventory equal to 20% of next month's production needs and a Chemical B inventory equal to 100% of next month's production needs. a. Prepare a production budget for Gertrude Products for the quarter ending September 30. Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory Budgeted production (units) Gertrude Products Production Budget For the Quarter Ending September 30 July 6,780 748 August September Total 7,480 8,080 22,340 808 908 908 748 808 808 7,540 8,180 22,620 b. Prepare a direct materials purchases budget for Chemical A for the quarter ending September 30. Assume a desired ending inventory for Chemical A of 9,100 pounds at September 30, and a constant unit cost of $2.70 per pound Note: Deductible answers must be indicated with a minus sign. Gertrude Products Direct Materials Purchases Budget (Chemical A) For the Quarter Ending September 30 July Budgeted production (units) Direct materials requirements per unit Total direct material needed August 7,540 September 8,180 Total 5 pounds 5 pounds Plus: Ending inventory 7,540 37,700 8,180 5 pounds 40,900 9,100 5 pounds Less: Beginning inventory Total purchases of Chemical A 34,940 38,340 41,820 Cost of Chemical A (per pound) 2.70 2.70 2.70 2.70 Budgeted cost of Chemical A purchases $ 103,518 112,914
Transcribed Image Text:Gertrude Products expects the following sales of its single product: Units June 6,280 July 6,780 August 7,480 September 8,080 October 9,080 Required Gertrude has an ending finished goods inventory policy of 10% of the next month's sales needs. Each unit requires 5 pounds of Chemical A and 14 pounds of Chemical B. July 1 materials inventory includes 8,600 pounds of Chemical A and 76,000 pounds of Chemical B. Gertrude desires to maintain a Chemical A inventory equal to 20% of next month's production needs and a Chemical B inventory equal to 100% of next month's production needs. a. Prepare a production budget for Gertrude Products for the quarter ending September 30. Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory Budgeted production (units) Gertrude Products Production Budget For the Quarter Ending September 30 July 6,780 748 August September Total 7,480 8,080 22,340 808 908 908 748 808 808 7,540 8,180 22,620 b. Prepare a direct materials purchases budget for Chemical A for the quarter ending September 30. Assume a desired ending inventory for Chemical A of 9,100 pounds at September 30, and a constant unit cost of $2.70 per pound Note: Deductible answers must be indicated with a minus sign. Gertrude Products Direct Materials Purchases Budget (Chemical A) For the Quarter Ending September 30 July Budgeted production (units) Direct materials requirements per unit Total direct material needed August 7,540 September 8,180 Total 5 pounds 5 pounds Plus: Ending inventory 7,540 37,700 8,180 5 pounds 40,900 9,100 5 pounds Less: Beginning inventory Total purchases of Chemical A 34,940 38,340 41,820 Cost of Chemical A (per pound) 2.70 2.70 2.70 2.70 Budgeted cost of Chemical A purchases $ 103,518 112,914
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