Meera Company is preparing its master budget for 2021. Relevant data pertaining to its production, direct materials and direct labor budgets are as follows. Production: The management has the following unit sales projections for 2021. Quarter 1 1500 2000 Quarter 2 Quarter 3 950 Quarter 4 950 Management desires to maintain the ending finished goods inventories at 30% of the next quarter's budgeted sales volume. Ending inventory of finished goods at December 31,2021, will be 320 units. Direct materials: Each unit requires 45 pounds of raw materials at a cost of OMR 15.5 per pound. Management desires to maintain raw materials inventories at 30% of the next quarter's production requirements. Assume that the ending inventory of raw material on December 31,2021 (Q4) is 1530 pounds. The estimated beginning inventory of raw material on January 1,2021(Q1) is 1490. Direct labor: Production of a single product requires 3 hours of time by employees. The employees are paid OMR 15.300 per hour. Requirements: 1. Prepare a production budget by quarters for 2021. 2. Prepare a direct materials budget by quarters for 2021. 3. Prepare a direct labor budget by quarters for 2021.
Meera Company is preparing its master budget for 2021. Relevant data pertaining to its production, direct materials and direct labor budgets are as follows. Production: The management has the following unit sales projections for 2021. Quarter 1 1500 2000 Quarter 2 Quarter 3 950 Quarter 4 950 Management desires to maintain the ending finished goods inventories at 30% of the next quarter's budgeted sales volume. Ending inventory of finished goods at December 31,2021, will be 320 units. Direct materials: Each unit requires 45 pounds of raw materials at a cost of OMR 15.5 per pound. Management desires to maintain raw materials inventories at 30% of the next quarter's production requirements. Assume that the ending inventory of raw material on December 31,2021 (Q4) is 1530 pounds. The estimated beginning inventory of raw material on January 1,2021(Q1) is 1490. Direct labor: Production of a single product requires 3 hours of time by employees. The employees are paid OMR 15.300 per hour. Requirements: 1. Prepare a production budget by quarters for 2021. 2. Prepare a direct materials budget by quarters for 2021. 3. Prepare a direct labor budget by quarters for 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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D - Please solve all sub-part questions with all steps. Thanks
Transcribed Image Text:Meera Company is preparing its master budget for 2021. Relevant data pertaining to its production,
direct materials and direct labor budgets are as follows.
Production: The management has the following unit sales projections for 2021.
Quarter 1
1500
Quarter 2
2000
Quarter 3
950
Quarter 4
950
Management desires to maintain the ending finished goods inventories at 30% of the next quarter's
budgeted sales volume. Ending inventory of finished goods at December 31,2021, will be 320 units.
Direct materials: Each unit requires 45 pounds of raw materials at a cost of OMR 15.5 per pound.
Management desires to maintain raw materials inventories at 30% of the next quarter's production
requirements. Assume that the ending inventory of raw material on December 31,2021 (Q4) is 1530
pounds. The estimated beginning inventory of raw material on January 1,2021(QI) is 1490.
Direct labor: Production of a single product requires 3 hours of time by employees. The employees
are paid OMR 15.300 per hour.
Requirements:
1. Prepare a production budget by quarters for 2021.
2. Prepare a direct materials budget by quarters for 2021.
3. Prepare a direct labor budget by quarters for 2021.
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