ter 10 Truck Production Beg Inv. Resin Budget -units Quarter Swisher Toys is pre

Question

ter 10 Truck Production Beg Inv. Resin Budget -units Quarter Swisher Toys is preparing its budget for 2017. Budgeted production of toy dump trucks for the year is given in the table Budget-Ibs Each truck requires 3 pounds of resin, which is used to produce the trucks. Each pound of resin costs $0.42. Budgeted resin inventories in lbs. are also given in the table. Prepare the direct materials budget by quarter and in total for 2017. Use the provided T- accounts to work out the material flows in pounds and then determine each quarter's purchase budget. Q1 -2017 Q2 -2017 Q3 -2017 Q4 2017 Q1-2018 420,000 500,000 900,000 360,000 380,000 450,000 810,000 324,000 250,000 Complete the T-Accounts RM-Q1 RM-Q2 1,500,000 Purchases EB RM-Q3 RM-Q4 Purchases EB Raw material usage is 3 lbs. for each unit of production. Complete the Budget Schedule Purchases -lbs unit cost urchase Budget Q1 -2017 Q2 -2017 Q3-2017 Q4-2017 Total 2017

Explanation / Answer

RM Q1 RM Q2 Q 1 Q 2 380000 1260000 450000 1500000 1330000 450000 1860000 810000 Beginning Balance 380000 Beginning Balance 450000 1710000 1710000 2310000 2310000 Purchases 1330000 Purchases 1860000 1330000 Purchases 1860000 Purchases Total 1710000 Total 2310000 Usage 1260000 Usage 1500000 Ending Balance 450000 Ending Balance 810000 RM Q3 RM Q1 Q 3 Q 4 810000 2700000 324000 1080000 2214000 324000 1006000 250000 Beginning Balance 810000 Beginning Balance 324000 3024000 3024000 1330000 1330000 Purchases 2214000 Purchases 1006000 2214000 Purchases 1006000 Purchases Total 3024000 Total 1330000 Usage 2700000 Usage 1080000 Ending Balance 324000 Ending Balance 250000 Raw material usage is 3 lbs for each unit of production Quarter Purchases Unit cost Purchase (lbs) Budget Q1 1330000 $0.42 558600 Q2 1860000 $0.42 781200 Q3 2214000 $0.42 929880 Q4 1006000 $0.42 422520 Total 2017 2692200

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