Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data. • Sales forecast for 20x0 (all units to be shipped in 20x0): ● Product Light coil Heavy coil Raw-material prices and inventory levels: Expected Inventories, January 1, 20x0 36,000 Pound 33,000 Pound 5,800 units Raw Material Sheet metal Copper wire Platform • Use of raw material: ● Units 58,000 38,000 Product Light coil Heavy coil Price Raw Material Sheet metal Copper wire Platform • Direct-labor requirements and rates: Product Light coil Heavy coil $ 280 380 Amount Used per Unit Light Coil 4 Pound 2 Pound Hours per Unit 3 5 Finished-goods inventories (in units): Desired Inventories, December 31, 20x0 40,000 Pound 36,000 Pound 6,800 units 20x0 23,000 9,500 Heavy Coil 5 Pound 3 Pound 2 unit Rate per Hour $15 20 Expected January 1, Desired December 31, 20x0 28,000 10,500 Anticipated Purchase Price $15 8 4
Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data. • Sales forecast for 20x0 (all units to be shipped in 20x0): ● Product Light coil Heavy coil Raw-material prices and inventory levels: Expected Inventories, January 1, 20x0 36,000 Pound 33,000 Pound 5,800 units Raw Material Sheet metal Copper wire Platform • Use of raw material: ● Units 58,000 38,000 Product Light coil Heavy coil Price Raw Material Sheet metal Copper wire Platform • Direct-labor requirements and rates: Product Light coil Heavy coil $ 280 380 Amount Used per Unit Light Coil 4 Pound 2 Pound Hours per Unit 3 5 Finished-goods inventories (in units): Desired Inventories, December 31, 20x0 40,000 Pound 36,000 Pound 6,800 units 20x0 23,000 9,500 Heavy Coil 5 Pound 3 Pound 2 unit Rate per Hour $15 20 Expected January 1, Desired December 31, 20x0 28,000 10,500 Anticipated Purchase Price $15 8 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare the raw material purchases budget (in quantities) for 20x0.
Transcribed Image Text:**Finished-Goods Inventories (in units):**
- **Product**
- **Expected January 1, 20x0**
- Light coil: 23,000 units
- Heavy coil: 9,500 units
- **Desired December 31, 20x0**
- Light coil: 28,000 units
- Heavy coil: 10,500 units
**Production Overhead:**
- **Overhead Cost Item** | **Activity-Based Budget Rate**
- Purchasing and material handling: $0.80 per pound of sheet metal and copper wire purchased
- Depreciation, utilities, and inspection: $7.00 per coil produced (either type)
- Shipping: $2.00 per coil shipped (either type)
- General production overhead: $5.00 per direct-labor hour
Transcribed Image Text:Vista Electronics, Incorporated, manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data.
- **Sales forecast for 20x0 (all units to be shipped in 20x0):**
| Product | Units | Price |
|------------|--------|-------|
| Light coil | 58,000 | $280 |
| Heavy coil | 38,000 | $380 |
- **Raw-material prices and inventory levels:**
| Raw Material | Expected Inventories, January 1, 20x0 | Desired Inventories, December 31, 20x0 | Anticipated Purchase Price |
|--------------|-------------------------------------|-------------------------------------|----------------------------|
| Sheet metal | 36,000 Pound | 40,000 Pound | $15 |
| Copper wire | 33,000 Pound | 36,000 Pound | $8 |
| Platform | 5,800 units | 6,800 units | $4 |
- **Use of raw material:**
| Raw Material | Light Coil | Heavy Coil |
|--------------|------------|------------|
| Sheet metal | 4 Pound | 5 Pound |
| Copper wire | 2 Pound | 3 Pound |
| Platform | 2 unit | 2 unit |
- **Direct-labor requirements and rates:**
| Product | Hours per Unit | Rate per Hour |
|------------|----------------|---------------|
| Light coil | 3 | $15 |
| Heavy coil | 5 | $20 |
- **Finished-goods inventories (in units):**
| Product | Expected January 1, 20x0 | Desired December 31, 20x0 |
|------------|--------------------------|---------------------------|
| Light coil | 23,000 | 28,000 |
| Heavy coil | 9,500 | 10,500 |
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