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Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,400 Second Quarter 22,000 Third Quarter 20,100 Fourth Quarter 22,000 Each light requires two separate LED bulbs, each of which costs $2. To ensure enough LED bulbs are on hand to support short-term production if a problem arises with the sole supplier, Fortin Limited maintains an ending inventory of 10% of the following quarter's production needs. A total of 5,600 LED bulbs will be on hand to start the first quarter of the upcoming fiscal year. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year. Required: Prepare a direct materials purchases budget for LED bulbs, by quarter and in total, for the upcoming fiscal year. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Hint: Fortin Limited maintains an ending inventory of both raw materials and finished goods of 10% of the following quarter's production needs. Before preparing a direct materials budget, the production budget must be prepared. FORTIN LIMITED Direct Materials Budget-Year 2

Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,400 Second Quarter 22,000 Third Quarter 20,100 Fourth Quarter 22,000 Each light requires two separate LED bulbs, each of which costs $2. To ensure enough LED bulbs are on hand to support short-term production if a problem arises with the sole supplier, Fortin Limited maintains an ending inventory of 10% of the following quarter's production needs. A total of 5,600 LED bulbs will be on hand to start the first quarter of the upcoming fiscal year. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year. Required: Prepare a direct materials purchases budget for LED bulbs, by quarter and in total, for the upcoming fiscal year. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Hint: Fortin Limited maintains an ending inventory of both raw materials and finished goods of 10% of the following quarter's production needs. Before preparing a direct materials budget, the production budget must be prepared. FORTIN LIMITED Direct Materials Budget-Year 2

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
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Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,400 Second Quarter 22,000 Third Quarter 20,100 Each light requires two separate LED bulbs, each of which costs $2. To ensure enough LED bulbs are on hand to support short-term production if a problem arises with the sole supplier, Fortin Limited maintains an ending inventory of 10% of the following quarter's production needs. A total of 5.600 LED bulbs will be on hand to start the first quarter of the upcoming fiscal year. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year. Required: Prepare a direct materials purchases budget for LED bulbs, by quarter and in total, for the upcoming fiscal year. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Hint: Fortin Limited maintains an ending inventory of both raw materials and finished goods of 10% of the following quarter's production needs. Before preparing a direct materials budget, the production budget must be prepared. FORTIN LIMITED Direct Materials Budget - Year 2 First Fourth Quarter 22,000 Quarter Second Third Fourth Year
Transcribed Image Text:Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,400 Second Quarter 22,000 Third Quarter 20,100 Each light requires two separate LED bulbs, each of which costs $2. To ensure enough LED bulbs are on hand to support short-term production if a problem arises with the sole supplier, Fortin Limited maintains an ending inventory of 10% of the following quarter's production needs. A total of 5.600 LED bulbs will be on hand to start the first quarter of the upcoming fiscal year. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year. Required: Prepare a direct materials purchases budget for LED bulbs, by quarter and in total, for the upcoming fiscal year. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Hint: Fortin Limited maintains an ending inventory of both raw materials and finished goods of 10% of the following quarter's production needs. Before preparing a direct materials budget, the production budget must be prepared. FORTIN LIMITED Direct Materials Budget - Year 2 First Fourth Quarter 22,000 Quarter Second Third Fourth Year
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