• The target closing inventory for pairs of shoes is 12% of next quarter's sales. • The target closing inventory for direct materials is 20% of next quarter's materials requirement. • The business currently uses $115 of direct material per unit. For the sake of simple budgeting, this is assumed to be 5kg worth of direct materials. • The business begins the quarter with 1925kg of direct materials on hand. • Quarter 2 and 3 information is provided only to help with preparing the Quarter 1 budget. You do not need to prepare a budget for Quarter 2 or 3 and there are no spaces for you to do so. • A reminder to always round up when calculating answers related to units. To enter each amount in the table, please enter just the number in whole dollars (no cents). No commas or dollar signs or spaces before or after the number. This is an auto-marked question using exact text matching and your answers must be just the number. PRODUCTION BUDGET Units expected to be sold Target closing inventory Total units required Less opening inventory Required production DIRECT MATERIALS BUDGET Direct materials required per pair of shoes Total direct materials required Add desired closing raw materials Total materials Budget table Quarter 1 3850 125 5kg kg kg kg Quarter 2 3560 474 Quarter 3 3950
• The target closing inventory for pairs of shoes is 12% of next quarter's sales. • The target closing inventory for direct materials is 20% of next quarter's materials requirement. • The business currently uses $115 of direct material per unit. For the sake of simple budgeting, this is assumed to be 5kg worth of direct materials. • The business begins the quarter with 1925kg of direct materials on hand. • Quarter 2 and 3 information is provided only to help with preparing the Quarter 1 budget. You do not need to prepare a budget for Quarter 2 or 3 and there are no spaces for you to do so. • A reminder to always round up when calculating answers related to units. To enter each amount in the table, please enter just the number in whole dollars (no cents). No commas or dollar signs or spaces before or after the number. This is an auto-marked question using exact text matching and your answers must be just the number. PRODUCTION BUDGET Units expected to be sold Target closing inventory Total units required Less opening inventory Required production DIRECT MATERIALS BUDGET Direct materials required per pair of shoes Total direct materials required Add desired closing raw materials Total materials Budget table Quarter 1 3850 125 5kg kg kg kg Quarter 2 3560 474 Quarter 3 3950
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:• The target closing inventory for pairs of shoes is 12% of next quarter's sales.
• The target closing inventory for direct materials is 20% of next quarter's materials
requirement.
• The business currently uses $115 of direct material per unit. For the sake of simple
budgeting, this is assumed to be 5kg worth of direct materials.
• The business begins the quarter with 1925kg of direct materials on hand.
• Quarter 2 and 3 information is provided only to help with preparing the Quarter 1 budget.
You do not need to prepare a budget for Quarter 2 or 3 and there are no spaces for you to
do so.
• A reminder to always round up when calculating answers related to units.
To enter each amount in the table, please enter just the number in whole dollars (no cents). No commas or dollar
signs or spaces before or after the number. This is an auto-marked question using exact text matching and your
answers must be just the number.
PRODUCTION BUDGET
Units expected to be sold
Target closing inventory
Total units required
Less opening inventory
Required production
DIRECT MATERIALS
BUDGET
Direct materials required per
pair of shoes
Total direct materials
required
Add desired closing raw
materials
Total materials
Budget table
Quarter 1
3850
125
5kg
kg
kg
kg
Quarter 2
3560
474
Quarter 3
3950
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