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    Production Budget / Material Purchase Budget

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    Production budget

    On January 1, 2009 the Batista Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2009.
    Sales units: First quarter 5,300; second quarter 6,300; third quarter 7,500
    Ending raw materials inventory: 50% of the next quarter's production requirements
    Ending finished goods inventory: 30% of the next quarter's expected sales units
    Third-quarter production: 7,800 units
    The ending raw materials and finished goods inventories at December 31, 2008, follow the same percentage relationships to production and sales that occur in 2009. 5 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.
    Prepare a production budget by quarters for the 6-month period ended June 30, 2009.
    BATISTA COMPANY
    Production Budget
    For the Six Months Ending June 30, 2009
    Quarter Six
    1 2 Months

    Add:
    Total required units
    Less:
    Required production units

    Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2009.
    BATISTA COMPANY
    Direct Materials Budget
    For the Six Months Ending June 30, 2009
    Quarter Six
    1 2 Months

    Direct materials per unit × ×
    Total pounds needed for production
    Add:
    Total materials required
    Less:
    Direct materials purchases
    × $ × $
    Total cost of direct materials purchases $ $ $

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    https://brainmass.com/business/budgets/production-budget-material-purchase-budget-329605

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    The solution explains how to prepare a production budget and a direct material purchases budget.

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