1 midwestinc manufactures and sells a single productnbsp

Reference no: EM13377612

1. MidwestInc. manufactures and sells a single product. They are in the process of preparing next quarter's budget and have provided the following data.

	Finished goods inventory, July 1	2,000 units
	Desired finished goods inventory, July 31	2,500 units
	Desired finished goods inventory, August 31	2,400 units
	Projected sales, July	6,000 units
	Projected sales, August	7,500 units
	Raw material required per unit	5 pounds
	Estimated raw material cost	$9 per pound
	Direct labor required per unit	2 hours
	Estimated direct labor rate	$16 per hour
	Factory overhead rate (based on direct labor)	$12 per hour

Company policy is to have enough material on hand at the end of each month to meet 30% of the following month's production needs.

a. How many pounds of material does Midwest Inc. plan to purchase in July?

b. What is the budgeted August 31 finished goods inventory balance (in dollars)?

a.	33,850 pounds
b.	$242,400

Workings:

For a.

Production budget for the month of July & August	July	August

Projected sales	6000	7500
Add: Desired finished goods inventory	2500	2400
Total unit requirements	8500	9900
Less; Beginning finished goods inventory	2000	2500
Production budget, in units for July	6500	7400

Raw materials purchase budget for July	July
Production budgeted in units, for July	6500
x Raw materials required per unit	5	pounds
Production requirement in pounds	32500
Add: Desired ending inventory
(30% x 7400 units x 5 pounds each)	11100
Total raw material requirements	43600
Less: Beginning raw materials
(30% x 6500 units x 5 pounds each)	9750
Raw materials purchases, in pounds	33850	pounds

For b.

Finished goods, in units, at August 31				2400units

Raw materials cost
(2400 units x 5 pounds per unit x $9 per pound)				$ 108,000
Direct labor cost
(2400 units x 2 hours per unit x $16 per hour)				$ 76,800
Factory overhead cost
(2400 units x 2 hours per unit x $12 per hour)				$ 57,600

Finished goods inventory balance, in dollars				$ 242,400
at August 31, budgeted

Reference no: EM13377612

Questions Cloud

If some auction participants for crude oil field leases : if some auction participants for crude oil field leases have estimates that the oil in the ground is worth 1.2 million

Create a flowchart by describing how money flows from the : create a flowchart by describing how money flows from the us federal reserve to the individual consumer and back to the

Question 1 in most organizations customer satisfaction is : question 1 in most organizations customer satisfaction is one of the top priorities. as such attention to customers is

Explain what could happen in the future with each of these : explain what could happen in the future with each of these trends below and come up with three3 more trends not listed

1 midwestinc manufactures and sells a single productnbsp : 1. midwestinc. manufactures and sells a single product.nbsp they are in the process of preparing next quarters budget

1 your company has recently implemented a standard costing : 1. your company has recently implemented a standard costing system.nbsp among the results from the first month are the

Explain the following statement changes in disposable : explain the following statement changes in disposable income lead to movements along the consumption function while

Explain the relationship among household disposable income : explain the relationship among household disposable income consumption and savings. what is marginal propensity to

1when the us real interest rate rises us dollar assets earn : 1.when the u.s. real interest rate rises .u.s. dollar assets earn a higher return relative to foreign assets makes u.s.

User Account

All Pages

1 midwestinc manufactures and sells a single productnbsp

Reference no: EM13377612

Reference no: EM13377612

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Cost accounting assignment

Prepare the journal entries

Advise as to the liability of all the parties

Prepare revenues budget

Effect of exchange rate changes on cash and cash

Corporate governance

Cost-benefit analysis

Non-annual interest rates and annuities

Job costing in service organizations

Accounting for bad debt expense

Accounting and partnership problems

Development of relevant cash flows

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT