9-27 Sales and Production Budgets The Scarborough Corporation manufactures and s

Question

9-27 Sales and Production Budgets The Scarborough Corporation manufactures and sells two products: Thingone and Thingtwo. In July 20X7, Scarborough's budget department gathered the following data in order to project sales and budget requirements for 20X8 20X8 Projected Sales: Thingone60,000 Thingtwo 40,000 Price $ 70 $100 20X8 Inventories-in units: Expected Desired Thingone Thingtwo January 1. 20X8 20,000 8,000 December 31, 20X8 25,000 9,000 In order to produce one unit of Thingone and Thingtwo, the following raw materials are used: ThingoneThingtwo Raw Materials 4 bs. each Projected data for 20X8 with respect to raw materials are as follows: ExpectedDesired Inventories Inventories Anticipated Purchase January 1, December 31, Price $8 $5 $3 Raw Materials 20X8 32,000 lbs. 29,000 lbs. 6,000 each 36,000 lbs. 32,000 lbs. 7,000 each

Explanation / Answer

Sales Budget

Production Budget (in quantities)

Raw Material Purchase Budget (quantities)

Working Notes:

Raw Material Purchase Budget (in Dollars)

Direct Labour Budget (in dollars)

Budgted Finished Goods Inventory (in dollars)

Working Notes:

Product Thingone Thingtwo Units sold 60000 40000 Selling Price / unit $ 70 $ 100 Sales Revenue $ 4,200,000 $ 4,000,000

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