of the year: 1. Expected monthly sales for April, May, June, and July are $180,000, $150,000, $270,000, and $50,000, respectively. 2. Cost of goods sold is 45 percent of expected sales. 3. CGC's desired ending inventory is 55 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: . Salaries: $33,000. • Delivery expense: 8 percent of monthly sales. • Rent expense on the warehouse: $2,500. • Utilities: $500. • Insurance: $330. . Other expenses: $430. Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second quarter.

of the year: 1. Expected monthly sales for April, May, June, and July are $180,000, $150,000, $270,000, and $50,000, respectively. 2. Cost of goods sold is 45 percent of expected sales. 3. CGC's desired ending inventory is 55 percent of the following month's cost of goods sold. 4. Monthly operating expenses are estimated to be: . Salaries: $33,000. • Delivery expense: 8 percent of monthly sales. • Rent expense on the warehouse: $2,500. • Utilities: $500. • Insurance: $330. . Other expenses: $430. Required: 1. Compute the budgeted cost of purchases for each month in the second quarter. 2. Complete the budgeted income statement for each month in the second 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

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Croy Inc. has the following projected sales for the next five months: Month Sales in Units April 3,540 May 3,865 June 4,540 July 4,155 August 3,920 Croy’s finished goods inventory policy is to have 60 percent of the next month’s sales on hand at the end of each month. Direct material costs $2.80 per pound, and each unit requires 2 pounds. Raw materials inventory policy is to have 50 percent of the next month’s production needs on hand at the end of each month. Raw materials on hand at March 31 totaled 3,735 pounds. Required:1. Determine budgeted production for April, May, and June. (Do not round your intermediate calculations and round your final answer to the nearest whole number.) 2. Determine the budgeted cost of materials purchased for April, May, and June. (Use rounded Budgeted Production units in intermediate calculations. Round your answers to 2 decimal places.)
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