The manufacturing section of Climax Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: June July August Units to be produced 10,000 7,500 7,000 In addition, the beginning raw materials inventory for the June is budgeted to be 7,600 grams and the beginning accounts payable for the June is budgeted to be $11,775. Each unit requires 8 grams of raw material that costs $2.50 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following months production needs. The desired ending inventory for the month of August is 3,700 grams. Management plans to pay for 70% of raw material purchases in the month acquired and 30% in the following month. Required: Prepare the company's direct materials budget and schedule of expected cash disbursements for purchases of materials for the month of June & July

The manufacturing section of Climax Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: June July August Units to be produced 10,000 7,500 7,000 In addition, the beginning raw materials inventory for the June is budgeted to be 7,600 grams and the beginning accounts payable for the June is budgeted to be $11,775. Each unit requires 8 grams of raw material that costs $2.50 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following months production needs. The desired ending inventory for the month of August is 3,700 grams. Management plans to pay for 70% of raw material purchases in the month acquired and 30% in the following month. Required: Prepare the company's direct materials budget and schedule of expected cash disbursements for purchases of materials for the month of June & July

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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