Roehler Industrial has estimated that production for the next five quarters will
ID: 2463907 • Letter: R
Question
Roehler Industrial has estimated that production for the next five quarters will be:
Finished units of production require 6 pounds of raw material per unit. The raw material cost is $6 per pound. There is $300,960 of raw material on hand at the beginning of the first quarter, 2014. Roehler desires to have 19 percent of next quarter's material requirements on hand at the end of each quarter.
Prepare quarterly direct materials purchases budgets for Roehler Industrial for 2014.
Roehler Industrial
Direct Materials Purchases Budget
For the Year Ending December 31, 2014
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Year
Production Information 1st quarter, 2014 44,000 units 2nd quarter, 2014 40,000 units 3rd quarter, 2014 48,000 units 4th quarter, 2014 39,000 units 1st quarter, 2015 46,000 unitsExplanation / Answer
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Units produce 44,000 40,000 48,000 39,000 171,000 Raw material required in per Units in pounds 6 6 6 6 6 Total Raw material required in in pounds 264,000 240,000 288,000 234,000 1,026,000 Raw material Cost per unit in $ 6 6 6 6 6 Total raw material required in $ 1,584,000 1,440,000 1,728,000 1,404,000 6,156,000 Less : begning inventory from last quarter 300,960 273,600 328,320 266,760 300,960 Add : Closing invenotry for nex quarted (19% of nexr quarter) 273,600 328,320 266,760 314,640 314,640 Raw material required for puchase in $ 1,556,640 1,494,720 1,666,440 1,451,880 6,169,680 Raw material required for puchase in pounds 259,440 249,120 277,740 241,980 1,028,280 * for Quarter 4 Closing inventory for Quarter 1 for next year calcultaion is (46000*6*6)*19%
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