MAXI Co. has the following information: *Projected sales for four (4) months are as follows: July-20,000 units; August -35,000 units ; September-25,000; October-30,000. Sales price per unit is $180 *Plans are to have a finished goods inventory end equal to 20% of the unit sales for next month. There was 4,000 units in beginning inventory on July 1. *Three (3) kilos of materials are required per unit produced. Every kilo of material is $20. Raw material inventory must be equal to 30% of the next month's needs . Desired ending inventory for September is 25,200 kilos and beginning inventory was 20,700 kilos. *Each unit requires 0.60 hours of direct labor and the average wage rate is $16 per hour. *Variable overhead rate is $3.50 per direct labor hour. There is also a fixed overhead of $22,000 per month. *The company pays 3% commission on sales. *Company has a monthly fixed and selling expenses as follows: Rent-$6,000 ; Utilities-$1,200 ; Advertising-$400: Office Salaries-$35,000. *Income tax rate at 35% Requirement: Prepare the operating budget and the necessary schedule for the 3rd quarter 1. Sales Budget 2. Production Budget 3. Raw Material Purchases Budget
MAXI Co. has the following information:
*Projected sales for four (4) months are as follows: July-20,000 units; August -35,000 units ; September-25,000; October-30,000. Sales price per unit is $180
*Plans are to have a finished goods inventory end equal to 20% of the unit sales for next month. There was 4,000 units in beginning inventory on July 1.
*Three (3) kilos of materials are required per unit produced. Every kilo of material is $20. Raw material inventory must be equal to 30% of the next month's needs . Desired ending inventory for September is 25,200 kilos and beginning inventory was 20,700 kilos.
*Each unit requires 0.60 hours of direct labor and the average wage rate is $16 per hour.
*Variable
*The company pays 3% commission on sales.
*Company has a monthly fixed and selling expenses as follows: Rent-$6,000 ; Utilities-$1,200 ; Advertising-$400: Office Salaries-$35,000.
*Income tax rate at 35%
Requirement: Prepare the operating budget and the necessary schedule for the 3rd quarter
1. Sales Budget
2. Production Budget
3. Raw Material Purchases Budget
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