Crest Products expects the following sales of its single product: Required: Crest has an ending...
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Crest Products expects the following sales of its single product: Required: Crest has an ending finished goods inventory policy of 30% of the next month's sales needs. September 1 inventory is projected to be 7,100 units. Each finished unit requires 2 units of Component X and 3 units of Component Z. August 1 materials inventory includes 5,000 units of Component X and 164,000 units of Component Z. Crest desires to maintain a Component X inventory equal to 10% of next month's production needs and a Component Z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31. b. Prepare a direct materials purchases budget for Component Z for quarter ending December 31. Assume a desired ending inventory for Component Z of 14,000 units at December 31, and a constant unit cost of $4 per lb
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Crest Products expects the following sales of its single product: Required: Crest has an ending finished goods inventory policy of 30% of the next month's sales needs. September 1 inventory is projected to be 7,100 units. Each finished unit requires 2 units of Component X and 3 units of Component Z. August 1 materials inventory includes 5,000 units of Component X and 164,000 units of Component Z. Crest desires to maintain a Component X inventory equal to 10% of next month's production needs and a Component Z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31. b. Prepare a direct materials purchases budget for Component Z for quarter ending December 31. Assume a desired ending inventory for Component Z of 14,000 units at December 31, and a constant unit cost of $4 per lb 