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Annie's Homemade prepares a direct materials budget for its ice cream base, which is the foundational component of all ice cream flavors. It includes ingredients such as whole milk, heavy cream, and sugar that provide a "blank canvas" for creating create specific flavors. The company buys ice cream base from a supplier for $62 per case, each of which contains two 2.5-gallon bladders. Each 2.5- gallon bladder produces an average of 40 servings of ice cream. The company always maintains ending inventories equal to 20% of next quarter's production needs. The estimated quarterly production (in servings) for next year are as follows: Quarter 1 13,200 Quarter 2 20,000 Budgeted production in servings Required: Prepare a direct materials budget by quarter and in total for next year. Quarter 3 30,000 Quarter 4 15, 200

Annie's Homemade prepares a direct materials budget for its ice cream base, which is the foundational component of all ice cream flavors. It includes ingredients such as whole milk, heavy cream, and sugar that provide a "blank canvas" for creating create specific flavors. The company buys ice cream base from a supplier for $62 per case, each of which contains two 2.5-gallon bladders. Each 2.5- gallon bladder produces an average of 40 servings of ice cream. The company always maintains ending inventories equal to 20% of next quarter's production needs. The estimated quarterly production (in servings) for next year are as follows: Quarter 1 13,200 Quarter 2 20,000 Budgeted production in servings Required: Prepare a direct materials budget by quarter and in total for next year. Quarter 3 30,000 Quarter 4 15, 200

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Annie's Homemade prepares a direct materials budget for its ice cream base, which is the foundational component of all ice cream flavors. It includes ingredients such as whole milk, heavy cream, and sugar that provide a "blank canvas" for creating create specific flavors. The company buys ice cream base from a supplier for $62 per case, each of which contains two 2.5-gallon bladders. Each 2.5- gallon bladder produces an average of 40 servings of ice cream. The company always maintains ending inventories equal to 20% of next quarter's production needs. The estimated quarterly production (in servings) for next year are as follows: Budgeted production in servings Servings per case Number of cases needed to meet production Add beginning inventory in cases Total cases needed Less desired ending inventory in cases Cases to be purchased Quarter 1 13,200 Required: Prepare a direct materials budget by quarter and in total for next year. Cost per case Cost of cases to be purchased $ $ 1 13,200 62 165 165 198 50 148 Quarter 2 20,000 62 $ $ 9,176 2 Quarter 3 30,000 Quarter 20,000 62 250 250 300 75 225 $ 62 13,950 $ 3 Quarter 4 15,200 30,000 62 375 190 450 38 412 62 $ 25,544 $ 4 15,200 62 190 34 228 0 228 62 14,136 $ Year 78,400 62 980 34 1,176 163 1,013 0
Transcribed Image Text:Annie's Homemade prepares a direct materials budget for its ice cream base, which is the foundational component of all ice cream flavors. It includes ingredients such as whole milk, heavy cream, and sugar that provide a "blank canvas" for creating create specific flavors. The company buys ice cream base from a supplier for $62 per case, each of which contains two 2.5-gallon bladders. Each 2.5- gallon bladder produces an average of 40 servings of ice cream. The company always maintains ending inventories equal to 20% of next quarter's production needs. The estimated quarterly production (in servings) for next year are as follows: Budgeted production in servings Servings per case Number of cases needed to meet production Add beginning inventory in cases Total cases needed Less desired ending inventory in cases Cases to be purchased Quarter 1 13,200 Required: Prepare a direct materials budget by quarter and in total for next year. Cost per case Cost of cases to be purchased $ $ 1 13,200 62 165 165 198 50 148 Quarter 2 20,000 62 $ $ 9,176 2 Quarter 3 30,000 Quarter 20,000 62 250 250 300 75 225 $ 62 13,950 $ 3 Quarter 4 15,200 30,000 62 375 190 450 38 412 62 $ 25,544 $ 4 15,200 62 190 34 228 0 228 62 14,136 $ Year 78,400 62 980 34 1,176 163 1,013 0
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