Hank Manufacturing maked cleaning solvent sold in large container with a plastic liner. Their monthly sales forecast consists of January: 40,000 units, February: 38,500 units, and March 39,750 units. Desired ending inventory of finished goods (in units) is 10% of the next month's sales forecast. Planned production (in units) for next quarter is: January: 43,800 units February: 41,000 units March: 50, 250 units Further, each container of cleaning solvent consists of: 6 gallons of chemicals 1 plastic liner Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. The policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2. The cost of one line is $1.60 December, ending inventory: 39,420 January, ending inventory: 36,900 February, ending inventory: 45, 225 Ending inventory of plastic coating(in units) December, ending inventory: 6570 January, ending inventory: 6150 February, ending inventory: 7537.50 1. Prepare a direct materials purchases budget for chemicals (in gallons) for January 2. Assume that cleaning solvent has a unit product cost of $5.25. Prepare an ending inventory budget of finished goods for January.
Hank Manufacturing maked cleaning solvent sold in large container with a plastic liner. Their monthly sales
Planned production (in units) for next quarter is:
January: 43,800 units
February: 41,000 units
March: 50, 250 units
Further, each container of cleaning solvent consists of:
6 gallons of chemicals
1 plastic liner
Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. The policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2. The cost of one line is $1.60
December, ending inventory: 39,420
January, ending inventory: 36,900
February, ending inventory: 45, 225
Ending inventory of plastic coating(in units)
December, ending inventory: 6570
January, ending inventory: 6150
February, ending inventory: 7537.50
1. Prepare a direct materials purchases budget for chemicals (in gallons) for January
2. Assume that cleaning solvent has a unit product cost of $5.25. Prepare an ending inventory budget of finished goods for January.
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