Hoffman Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Hoffman Industries has a policy that states that the ending inventory of computer chips should be at least 30% of the following month's production needs. The production schedule for the first four months of the year is as follows: Stuffed animals to be produced January. . . . . 5,600 February. . . . 4,100 March. . . . . 4,900 April. . . . . . . 4,800 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. Hoffman Industries Direct Materials Budget For the Months of January through March January February March Quarter Units to be produced ? ? ? ? Multiply by: Quantity of direct materials needed per unit ? ? ? ? Quantity needed for production ? ? ? ? Plus: Desired ending inventory of direct materials ? ? ? ? Total quantity needed ? ? ? ?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Hoffman Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Hoffman Industries has a policy that states that the ending inventory of computer chips should be at least 30% of the following month's production needs. The production schedule for the first four months of the year is as follows:

	Stuffed animals to be produced
January. . . . .	5,600
February. . . .	4,100
March. . . . .	4,900
April. . . . . . .	4,800

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.



Hoffman Industries Direct Materials Budget For the Months of January through March
	January	February	March	Quarter
Units to be produced	?	?	?	?
Multiply by: Quantity of direct materials needed per unit	?	?	?	?
Quantity needed for production	?	?	?	?
Plus: Desired ending inventory of direct materials	?	?	?	?
Total quantity needed	?	?	?	?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions