prepair a direct materials budget for the first TWO quarters of 2020 Fillmore...
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prepair a direct materials budget for the first TWO quarters of 2020
Fillmore Company has developed the following standards related to the production of their finished units: Direct Materials (6 pounds per unit @ $5 per pound) Direct Labor (9 hours per unit @ $22 per direct labor hour) Variable Overhead (4 machine hours @ $7 per machine hour) Fixed overhead costs are estimated at $542,000 per quarter. Selling and administrative costs are expected to be $3 per unit variable and $450,000 fixed per quarter. The expected selling price is $360 per unit. The following sales forecast is available for the year 2020: 1st Quarter 14,000 units; 2nd Quarter 16,000 units; 3rd Quarter 19,000 units; and the 4th Quarter 18,000 units. The expected sales in the 1st Quarter of the year 2021 are 17,000 units. Management policy is to maintain a finished goods inventory equal to 25% of the next quarter's sales and a raw materials inventory equal to 10% of the next quarter's material production requirements. The beginning inventories of the 1st quarter of the year 2020 are expected to meet these same requirements, 3 Workpaper #2 4 2. DIRECT MATERIALS PURCHASE BUDGET 5 Quarter 1 6 7 Quarter 2 Quarter 3 Quarter 4 Total 8 9 0 2 3 1 5 6
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