Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total.
Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales:
|
January |
41,000 |
|
February |
38,000 |
|
March |
50,000 |
|
April |
51,000 |
Patrick's policy is to have 25% of next month's sales in ending inventory. On January 1, it is expected that there will be 6,700 drums of solvent on hand.
Required:
Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total.
3.
Patrick Inc. makes industrial solvents sold in 5-gallon drum containers. Planned production in units for the first 3 months of the coming year is:
January 43,800
February 41,000
March 50,250
Each drum requires 5.5 gallons of chemicals and one plastic drum container. Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one drum is $1.60.
Required:
- Calculate the ending inventory of chemicals in gallons for December of the prior year, and for January and February. What is the beginning inventory of chemicals for January?
- Prepare a direct materials purchases budget for chemicals for the months of January and February.
- Calculate the ending inventory of drums for December of the prior year, and for January and February. Round your answers to the nearest whole unit.
- Prepare a direct materials purchases budget for drums for the months of January and February.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
