ezto.mheducation.com SecuriCorp Operates A Fleet Of Armored Cars Chapter 9 Homew
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ezto.mheducation.com SecuriCorp Operates A Fleet Of Armored Cars Chapter 9 Homework Chapter 8 Homework Chegg Study | Guided Solutions and Study H Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company's products. The company is now planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements a. The finished goods inventory on hand at the end of each month must be equal to 3,000 units of Supermix plus 25% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 13,250 units b. The raw materials inventory on hand at the end of each month must be equal to one-half of the following month's production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 60,000 cc of solvent H300. c. The company maintains no work in process inventories. A sales budget for Supermix for the last six months of the year follows. Budgeted Sales in Units 41,000 46,000 56,000 36,000 26,000 16,000 July August October November December Required: 1. Prepare a production budget for Supermix for the months July, August, September, and October Pearl Products Limited Production Budget July AugustSeptember October Budgeted unit sales Total needs Required production in unitsExplanation / Answer
1.Production Budget for Supermix for the months of July , August, September and October
Pearl Products Limited
Production Budget
July
August
September
October
Budgeted unit sales
41000
46000
56000
36000
Add: Closing Inventory
14500
17000
12000
9500
Total Needs
55500
63000
68000
45500
Less: Opening Inventory
(13250)
(14500)
(17000)
(12000)
Required Production in units
42250
48500
51000
33500
Working Notes:Calculation of Closing Finished Goods=3000units+25%(next month’s sales)
July: 3000 units+25%( 46,000)=14500 units
Aug: 3000 units+ 25%(56000)=17000 units
Sept: 3000 units+25%(36000)=12000 units
Oct: 3000 units+25% (26000)=9500 units
3. Quantity of Direct Materials Budget showing quantity of solvent H300 to be purchased
Pearl Products Limited
Direct Materials Budget
July
August
September
Third Quarter
Units of raw materials
Needed to meet production
126750
145500
153000
100500
Add: Closing inventory of
Raw Materials
72750
76500
50250
35250
Total units of Raw Material
Needed
199500
222000
203250
135750
Less: Opening inventory of
Raw Materials
60000
72750
76500
50250
Units of raw material to be
Purchased
139500
149250
126750
85500
Working Notes:
1)Raw Material required for production:
July: 42250 units*3cc=126750 cc
Aug:48500 units*3cc=145500 cc
Sept:51000 units*3cc=153000 cc
Oct:33500 units*3cc=100500 cc
2.Closing stock of raw material: 50%( Raw materials required for next month’s production)
July: 48500*3/2= 72750cc
Aug:51000*3/2=76500 cc
Sept:33500*3/2=50250 cc
Oct: 23500*3/2=35250 cc
Pearl Products Limited
Production Budget
July
August
September
October
Budgeted unit sales
41000
46000
56000
36000
Add: Closing Inventory
14500
17000
12000
9500
Total Needs
55500
63000
68000
45500
Less: Opening Inventory
(13250)
(14500)
(17000)
(12000)
Required Production in units
42250
48500
51000
33500
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