Mini Products, Inc., has developed a small digital clock. Each clock requires five small batteries that cost $6 each and are purchased from an overseas supplier. Mini Products has prepared a production budget for the clock by quarters for Year 3 and for the first quarter of Year 4, as shown below: Required production of clocks First 40,000 Year 3 Second Third Fourth 60,000 45,000 55,000 Year 4 First 44,000 The battery used in production of the clock is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of batteries at the end of a quarter must equal 25% of the following quarter's production needs. A total of 50,000 batteries will be on hand to start the first quarter of Year 3. Required: Prepare a direct materials budget for batteries, by quarter and in total, for Year 3. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. [LO4]

Mini Products, Inc., has developed a small digital clock. Each clock requires five small batteries that cost $6 each and are purchased from an overseas supplier. Mini Products has prepared a production budget for the clock by quarters for Year 3 and for the first quarter of Year 4, as shown below: Required production of clocks First 40,000 Year 3 Second Third Fourth 60,000 45,000 55,000 Year 4 First 44,000 The battery used in production of the clock is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of batteries at the end of a quarter must equal 25% of the following quarter's production needs. A total of 50,000 batteries will be on hand to start the first quarter of Year 3. Required: Prepare a direct materials budget for batteries, by quarter and in total, for Year 3. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. [LO4]

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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