On January 1, 2022, the Sheffield Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2022 Sales units: Ending raw materials inventory: Ending finished goods inventory. Third-quarter production: First quarter 7,300: second quarter 8,760; third quarter 10,220. 40% of the next quarter's production requirements. 25% of the next quarter's expected sales units. 10,570 units. The ending raw materials and finished goods inventories at December 31, 2021, follow the same percentage relationships to production and sales that occur in 2022. Three pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.
On January 1, 2022, the Sheffield Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2022 Sales units: Ending raw materials inventory: Ending finished goods inventory. Third-quarter production: First quarter 7,300: second quarter 8,760; third quarter 10,220. 40% of the next quarter's production requirements. 25% of the next quarter's expected sales units. 10,570 units. The ending raw materials and finished goods inventories at December 31, 2021, follow the same percentage relationships to production and sales that occur in 2022. Three pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2020.
I
S
SHEFFIELD COMPANY
Direct Materials Budget
Quarter
Transcribed Image Text:On January 1, 2022, the Sheffield Company budget committee has reached agreement on the following data for the 6 months ending
June 30, 2022
Sales units:
Ending raw materials inventory:
Ending finished goods inventory.
Third-quarter production:
First quarter 7,300: second quarter 8,760; third quarter 10,220.
40% of the next quarter's production requirements.
25% of the next quarter's expected sales units.
10,570 units.
The ending raw materials and finished goods inventories at December 31, 2021, follow the same percentage relationships to
production and sales that occur in 2022. Three pounds of raw materials are required to make each unit of finished goods. Raw
materials purchased are expected to cost $4 per pound.
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