Metlock Industries has adopted the following production budget for the four quarters of 2022: Units Quarter 1 6,100 Quarter 2 Quarter 3 7,800 8.900 Quarter 4 9,900 Each unit requires 3 kg of raw materials costing $6 per kilogram. On December 31, 2021, the ending raw materials inventory was 1,830 kg. Management wants to have a raw materials inventory at the beginning of each quarter equal to 30% of the current quarter's production requirements. The production budget for the first quarter of 2023 will be 12,000 units. Prepare a direct materials purchases budget by quarters for 2022. METLOCK INDUSTRIES Direct Materials Purchases Budget (kg) For the year ending December 31, 2022 Quarter

Metlock Industries has adopted the following production budget for the four quarters of 2022: Units Quarter 1 6,100 Quarter 2 Quarter 3 7,800 8.900 Quarter 4 9,900 Each unit requires 3 kg of raw materials costing $6 per kilogram. On December 31, 2021, the ending raw materials inventory was 1,830 kg. Management wants to have a raw materials inventory at the beginning of each quarter equal to 30% of the current quarter's production requirements. The production budget for the first quarter of 2023 will be 12,000 units. Prepare a direct materials purchases budget by quarters for 2022. METLOCK INDUSTRIES Direct Materials Purchases Budget (kg) For the year ending December 31, 2022 Quarter

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...

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Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
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