Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 16,100 units plus 10% of the next month's sales. The finished goods inventory on March: is budgeted to be 27,000 units. b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 99,000 components. c. The company maintains no work in process inventories. A sales budget for the All Weather speaker is as follows: April May June July August Budgeted Sales in Units 127,000 147,000 208,000 114,000 60, 600 Required: 1. Prepare a production budget for the All Weather for April, May, June and July. Budgeted sales (units) Total needs Required production April 0 0 May 0 0 June 0 0 July 0 2. Prepare a direct materials purchases budget showing the quantity of XL 12 components to be purchased for April, May and June and for the quarter in total.
Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 16,100 units plus 10% of the next month's sales. The finished goods inventory on March: is budgeted to be 27,000 units. b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 99,000 components. c. The company maintains no work in process inventories. A sales budget for the All Weather speaker is as follows: April May June July August Budgeted Sales in Units 127,000 147,000 208,000 114,000 60, 600 Required: 1. Prepare a production budget for the All Weather for April, May, June and July. Budgeted sales (units) Total needs Required production April 0 0 May 0 0 June 0 0 July 0 2. Prepare a direct materials purchases budget showing the quantity of XL 12 components to be purchased for April, May and June and for the quarter in total.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A7
Transcribed Image Text:Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is
the All Weather and requires four separate XL12 components per unit. The company is now planning raw material
needs for the second quarter. Sales of the All Weather are the highest in the second quarter of each year as customers
prepare for the summer season. The company has the following inventory requirements:
a. The finished goods inventory on hand at the end of each month must be equal to 16,100 units plus 10% of the next
month's sales. The finished goods inventory on March 31 is budgeted to be 27,000 units.
b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's
production needs for raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 99,000
components.
c. The company maintains no work in process inventories.
A sales budget for the All Weather speaker is as follows:
April
May
June
July
August
Budgeted Sales in
Units
127,000
147,000
208,000
114,000
60, 600
Required:
1. Prepare a production budget for the All Weather for April, May, June and July.
April
Budgeted sales (units)
Total needs
Required production
Required production (units)
XL 12 components needed per unit
Production needs
Total XL 12 needs
0
Material XL 12 purchases
0
May
April
0
0
0
0
2. Prepare a direct materials purchases budget showing the quantity of XL 12 components to be purchased for April,
May and June and for the quarter in total.
June
May
0
0
0
0
June
0
July
0
0
0
Second
Quarter
0
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