Sheffield Chemicals has developed a new window cleaner that requires two ingredients, AM972 and CA38. Based on forecasted sales, Sheffield has developed the following budgeted production for the coming year. 1st Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Next Year Forecasted production (gallons) 5,500 7,000 9,000 15,000 6,000 Each gallon of window cleaner requires 100 ounces of AM972 and 28 ounces of CA38. An ounce of AM972 costs Sheffield $0.20. An ounce of CA38 costs the company $0.25. Sheffield's inventory policy requires ending inventory equal to 20% of the next quarter's production needs. At the beginning of the year, Sheffield expects to have 80,000 ounces of AM972 and 30,000 ounces of CA38 on hand. Prepare Sheffield's AM972 purchases budget for the coming year. (Enter price per ounce to 2 decimal places, e.g. 0.35.)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sheffield Chemicals has developed a new window cleaner that requires two ingredients, AM972 and CA38. Based on forecasted
sales, Sheffield has developed the following budgeted production for the coming year.
1st Quarter
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Next Year
Forecasted production (gallons)
5,500
7,000
9,000
15,000
6,000
Each gallon of window cleaner requires 100 ounces of AM972 and 28 ounces of CA38. An ounce of AM972 costs Sheffield $0.20. An
ounce of CA38 costs the company $0.25. Sheffield's inventory policy requires ending inventory equal to 20% of the next quarter's
production needs. At the beginning of the year, Sheffield expects to have 80,000 ounces of AM972 and 30,000 ounces of CA38 on
hand.
Prepare Sheffield's AM972 purchases budget for the coming year. (Enter price per ounce to 2 decimal places, e.g. 0.35.)
1st Quarter
2nd Quarter
3rd Quarter
Budgeted production
5500
7000
Standard ounces per gallon
100
100
Production needs
550000
700,000
Budgeted ending inventory
140,000
180000
Total DM required (ounces)
690000
880000
Beginning inventory
80000
-140000
i
-1800
Budgeted purchases (ounces)
610000
740000
Standard price per ounce
.20
$
.20
$
Budgeted purchases cost
$
122000
$
148000
$
%24
%24
>
Transcribed Image Text:Sheffield Chemicals has developed a new window cleaner that requires two ingredients, AM972 and CA38. Based on forecasted sales, Sheffield has developed the following budgeted production for the coming year. 1st Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Next Year Forecasted production (gallons) 5,500 7,000 9,000 15,000 6,000 Each gallon of window cleaner requires 100 ounces of AM972 and 28 ounces of CA38. An ounce of AM972 costs Sheffield $0.20. An ounce of CA38 costs the company $0.25. Sheffield's inventory policy requires ending inventory equal to 20% of the next quarter's production needs. At the beginning of the year, Sheffield expects to have 80,000 ounces of AM972 and 30,000 ounces of CA38 on hand. Prepare Sheffield's AM972 purchases budget for the coming year. (Enter price per ounce to 2 decimal places, e.g. 0.35.) 1st Quarter 2nd Quarter 3rd Quarter Budgeted production 5500 7000 Standard ounces per gallon 100 100 Production needs 550000 700,000 Budgeted ending inventory 140,000 180000 Total DM required (ounces) 690000 880000 Beginning inventory 80000 -140000 i -1800 Budgeted purchases (ounces) 610000 740000 Standard price per ounce .20 $ .20 $ Budgeted purchases cost $ 122000 $ 148000 $ %24 %24 >
Sheffield Chemicals has developed a new window cleaner that requires two ingredients, AM972 and CA38. Based on forecasted
sales, Sheffield has developed the following budgeted production for the coming year.
1st Quarter
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Next Year
Forecasted production (gallons)
5,500
7,000
9,000
15,000
6,000
Each gallon of window cleaner requires 100 ounces of AM972 and 28 ounces of CA38. An ounce of AM972 costs Sheffield $0.20. An
ounce of CA38 costs the company $0.25. Sheffield's inventory policy requires ending inventory equal to 20% of the next quarter's
production needs. At the beginning of the year, Sheffield expects to have 80,000 ounces of AM972 and 30,000 ounces of CA38 on
hand.
Prepare Sheffield's AM972 purchases budget for the coming year. (Enter price per ounce to 2 decimal places, e.g. 0.35.)
nd Quarter
3rd Quarter
4th Quarter
Annual
7000
9000
15000
36500
100
100
100
100
700,000
900000
1,500,000
3650000
180000
300000
120,000
740,000
880000
1200,000
1620000
1105000
-140000
i
-180000 i
-300,000 i
-80000
740000
1020000
1320000
1025000
.20
.20
$
.20
2$
.20
148000
$
204000
264000
$
205000
%24
%24
%24
Transcribed Image Text:Sheffield Chemicals has developed a new window cleaner that requires two ingredients, AM972 and CA38. Based on forecasted sales, Sheffield has developed the following budgeted production for the coming year. 1st Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Next Year Forecasted production (gallons) 5,500 7,000 9,000 15,000 6,000 Each gallon of window cleaner requires 100 ounces of AM972 and 28 ounces of CA38. An ounce of AM972 costs Sheffield $0.20. An ounce of CA38 costs the company $0.25. Sheffield's inventory policy requires ending inventory equal to 20% of the next quarter's production needs. At the beginning of the year, Sheffield expects to have 80,000 ounces of AM972 and 30,000 ounces of CA38 on hand. Prepare Sheffield's AM972 purchases budget for the coming year. (Enter price per ounce to 2 decimal places, e.g. 0.35.) nd Quarter 3rd Quarter 4th Quarter Annual 7000 9000 15000 36500 100 100 100 100 700,000 900000 1,500,000 3650000 180000 300000 120,000 740,000 880000 1200,000 1620000 1105000 -140000 i -180000 i -300,000 i -80000 740000 1020000 1320000 1025000 .20 .20 $ .20 2$ .20 148000 $ 204000 264000 $ 205000 %24 %24 %24
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