Sacco Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stockouts of the computer chip, Sacco Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: E (Click the icon to view the production schedule.) Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget Sacco Industries Direct Materials Budget For the Months of January through March Data table January February March Quarter Units to be produced 5,600 4,800 4,200 14,600 Stuffed animals to be produced Multiply by: Quantity of direct materials needed per unit January.... 5,600 Quantity needed for production February.... 4,800 Plus: Desired ending inventory of direct materials March..... 4,200 Total quantity needed April........ 4,000 Print Done
Sacco Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stockouts of the computer chip, Sacco Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows: E (Click the icon to view the production schedule.) Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget Sacco Industries Direct Materials Budget For the Months of January through March Data table January February March Quarter Units to be produced 5,600 4,800 4,200 14,600 Stuffed animals to be produced Multiply by: Quantity of direct materials needed per unit January.... 5,600 Quantity needed for production February.... 4,800 Plus: Desired ending inventory of direct materials March..... 4,200 Total quantity needed April........ 4,000 Print Done
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sacco Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $2 for each computer chip. To help to guard against stockouts of the computer chip, Sacco Industries has a
policy that states that the ending inventory of computer chips should be at least 25% of the following month's production needs. The production schedule for the first four months of the year is as follows:
E (Click the icon to view the production schedule.)
Requirement
Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget.
.....
Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget.
Sacco Industries
Direct Materials Budget
- X
For the Months of January through March
Data table
January
February
March
Quarter
Units to be produced
5,600
4,800
4,200
14,600
Stuffed animals to be produced
Multiply by: Quantity of direct materials needed per unit
January.....
5,600
Quantity needed for production
February ....
4,800
Plus: Desired ending inventory of direct materials
March
4,200
Total quantity needed
April........
4,000
Print
Done
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