Chapter 8, Problem 3CE

Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKick’s policy is that 20 percent of the following month’s production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement.

Required:

1. 1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year.
2. 2. What if FlashKick decreased the ending inventory percentage to 15 percent of the next month’s production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1?

Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next month’s unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls.

Required:

1. 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year.
2. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget?