Wileyplus chapter 9 E9-6 On January 1, 2012 the Lovell Company budget committee
ID: 2344128 • Letter: W
Question
Wileyplus chapter 9 E9-6On January 1, 2012 the Lovell Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2012.
Sales units: First quarter 5,000; second quarter 6,000; third quarter 7,000
Ending raw materials inventory: 50% of the next quarter's productiorequirements
Ending finished goods inventory: 30% of the next quarter's expected sales units
Third-quarter production: 7,250 units
The ending raw materials and finished goods inventories at December 31, 2011, follow the same percentage relationships to production and sales that occur in 2012. Three pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.
Complete the production budget by quarters for the 6-month period ended June 30, 2012. (Enter all amounts as positive amounts and subtract where necessary.)
Quarter
1 2 3
Expected unit sales (I got correct)
Add: Desired ending finished goods units (I got correct)
(dont know)
Less: Beginning finished goods units (I got correct)
Required production units (I got correct)
Explanation / Answer
Lovell Company
Production Budget
For the half year ended June 30, 2012
Quarter
Total of the Year
1
2
Expected unit sales
5,000
6,000
11,000
Add: Desired ending finished goods units
1,800
2,100
2,100
Total required units
6,800
8,100
13,100
Less: Beginning finished goods units
(1,500)
1,800
(1,500)
Required production units
5,300
6,300
11,600
Lovell Company
Production Budget
For the half year ended June 30, 2012
Quarter
Total of the Year
1
2
Expected unit sales
5,000
6,000
11,000
Add: Desired ending finished goods units
1,800
2,100
2,100
Total required units
6,800
8,100
13,100
Less: Beginning finished goods units
(1,500)
1,800
(1,500)
Required production units
5,300
6,300
11,600
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