Sheridan Company has 1,824 pounds of raw materials in its December 31, 2021, ending inventory. Required production for January and February of 2022 are 4,560 and 5,700 units, respectively. Two pounds of raw materials are needed for each unit, and the estimated cost per pound is $7. Management desires an ending inventory equal to 20% of next month's materials requirements. Prepare the direct materials budget for January. Units to be Produced Direct Materials Pounds Per Unit Total Pounds Required for Production Add SHERIDAN COMPANY Direct Materials Budget For the Month Ending January 31, 2022 Desired Ending Inventory Pounds Total Materials Required Less : Beginning Materials Inventory Direct Materials Units to be Purchased Cost Per Pound Total Cost of Direct Materials Purchases $ CA $ LA 4560 2 9120 1824 i 7
Sheridan Company has 1,824 pounds of raw materials in its December 31, 2021, ending inventory. Required production for January and February of 2022 are 4,560 and 5,700 units, respectively. Two pounds of raw materials are needed for each unit, and the estimated cost per pound is $7. Management desires an ending inventory equal to 20% of next month's materials requirements. Prepare the direct materials budget for January. Units to be Produced Direct Materials Pounds Per Unit Total Pounds Required for Production Add SHERIDAN COMPANY Direct Materials Budget For the Month Ending January 31, 2022 Desired Ending Inventory Pounds Total Materials Required Less : Beginning Materials Inventory Direct Materials Units to be Purchased Cost Per Pound Total Cost of Direct Materials Purchases $ CA $ LA 4560 2 9120 1824 i 7
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:Sheridan Company has 1,824 pounds of raw materials in its December 31, 2021, ending inventory. Required production for January
and February of 2022 are 4,560 and 5,700 units, respectively. Two pounds of raw materials are needed for each unit, and the
estimated cost per pound is $7. Management desires an ending inventory equal to 20% of next month's materials requirements.
Prepare the direct materials budget for January.
Units to be Produced
Direct Materials Pounds Per Unit
Total Pounds Required for Production
Add
SHERIDAN COMPANY
Direct Materials Budget
For the Month Ending January 31, 2022
Total Materials Required
Less :
Desired Ending Inventory Pounds
Beginning Materials Inventory
Direct Materials Units to be Purchased
Cost Per Pound
Total Cost of Direct Materials Purchases
>
$
CA
$
LA
4560
2
9120
1824
ww
7
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