Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Ingles, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 16 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40 percent of next month’s sales are in the finished goods inventory. Ingles also purchases sufficient materials to ensure that materials inventory is 60 percent of the following month’s scheduled production. Ingles’s sales budget inunits for the next quarter is as follows: July 2,450August 2,900September 2,100Ingles’s ending inventories in units for July 31 are as follows:Finished goods 1,900Materials (legs) 4,000 Required:1. Calculate the number of tables to be produced during August. 2. Disregarding your response to Requirement 1, assume the required production units for Au-gust and September are 2,100 and 1,900, respectively, and the July 31 materials inventory is 4,000 units. Compute the number of table legs to be purchased in August. 3. Assume that Ingles Corporation will produce 2,340 units in September. How many employ-ees will be required for the Assembly Department in September? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 40-hour week and a4-week month.) (CMA adapted)
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Ingles, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 16 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40 percent of next month’s sales are in the finished goods inventory. Ingles also purchases sufficient materials to ensure that materials
inventory is 60 percent of the following month’s scheduled production. Ingles’s sales budget in
units for the next quarter is as follows:
July 2,450
August 2,900
September 2,100
Ingles’s ending inventories in units for July 31 are as follows:
Finished goods 1,900
Materials (legs) 4,000
Required:
1. Calculate the number of tables to be produced during August.
2. Disregarding your response to Requirement 1, assume the required production units for Au-
gust and September are 2,100 and 1,900, respectively, and the July 31 materials inventory is 4,000 units. Compute the number of table legs to be purchased in August.
3. Assume that Ingles Corporation will produce 2,340 units in September. How many employ-
ees will be required for the Assembly Department in September? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 40-hour week and a
4-week month.) (CMA adapted)
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