Question: Snip and Chip Inc. sells silk upholstery curtains for $150 each. The project's budgeted unit sales for four months during the current year appear below: February $ 39,000 April $ 42,000 May $ 44,000 June $ 40,000 Additional information: The project desires to have an inventory at the end of each month equal to 15 percent of the following months budgeted unit sales. 1. Each curtain requires 2.0 yards of fabric. 2. At the end of each month, the project decides to have 20 percent of the production material required for the next month on hand. 3. The fabric costs $25 per yard. Each curtain produced requires 1 hour of direct labor. 4. The project pays $27 per hour to its employees. Prepare the following budgets for the project: a. Production budget for the month of April. b. Materials purchase budget for April. Conrad, Inc. recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records. Cost of Goods Sold Work-in-Process Inventory, Beginning Work-in-Process Inventory, Ending Selling and Administrative Expense Finished Goods Inventory, Ending Finished Goods Inventory, Beginning Direct Materials Used $ 65,000 $ 10,500 $ 9,000 $ 15,000 $ 15,000 Factory Overhead Applied $ 12,000 Operating Income $ 14,000 Direct Materials Inventory, Beginning $ 11,000 Direct Materials Inventory, Ending $ 6,000 Cost of Goods Manufactured $ 60,000 Direct labor costs incurred during the period amounted to 1.5 times the factory overhead. The CFO of Fisher, Inc. has asked you to recalculate the following accounts and to report to him by the end of the day. What is the amount of direct materials purchased?
Question: Snip and Chip Inc. sells silk upholstery curtains for $150 each. The project's budgeted unit sales for four months during the current year appear below: February $ 39,000 April $ 42,000 May $ 44,000 June $ 40,000 Additional information: The project desires to have an inventory at the end of each month equal to 15 percent of the following months budgeted unit sales. 1. Each curtain requires 2.0 yards of fabric. 2. At the end of each month, the project decides to have 20 percent of the production material required for the next month on hand. 3. The fabric costs $25 per yard. Each curtain produced requires 1 hour of direct labor. 4. The project pays $27 per hour to its employees. Prepare the following budgets for the project: a. Production budget for the month of April. b. Materials purchase budget for April. Conrad, Inc. recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records. Cost of Goods Sold Work-in-Process Inventory, Beginning Work-in-Process Inventory, Ending Selling and Administrative Expense Finished Goods Inventory, Ending Finished Goods Inventory, Beginning Direct Materials Used $ 65,000 $ 10,500 $ 9,000 $ 15,000 $ 15,000 Factory Overhead Applied $ 12,000 Operating Income $ 14,000 Direct Materials Inventory, Beginning $ 11,000 Direct Materials Inventory, Ending $ 6,000 Cost of Goods Manufactured $ 60,000 Direct labor costs incurred during the period amounted to 1.5 times the factory overhead. The CFO of Fisher, Inc. has asked you to recalculate the following accounts and to report to him by the end of the day. What is the amount of direct materials purchased?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
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Transcribed Image Text:Question:
Snip and Chip Inc. sells silk upholstery curtains for $150 each. The
project's budgeted unit sales for four months during the current year
appear below:
February $ 39,000
April
$ 42,000
May
$ 44,000
June
$ 40,000
Additional information:
The project desires to have an inventory at the end of each month equal
to 15 percent of the following months budgeted unit sales.
1. Each curtain requires 2.0 yards of fabric.
2. At the end of each month, the project decides to have 20 percent of
the production material required for the next month on hand.
3. The fabric costs $25 per yard. Each curtain produced requires 1 hour
of direct labor.
4. The project pays $27 per hour to its employees.
Prepare the following budgets for the project:
a. Production budget for the month of April.
b. Materials purchase budget for April.
Conrad, Inc. recently lost a portion of its records in an office fire. The
following information was salvaged from the accounting records.
Cost of Goods Sold
Work-in-Process Inventory, Beginning
Work-in-Process Inventory, Ending
Selling and Administrative Expense
Finished Goods Inventory, Ending
Finished Goods Inventory, Beginning
Direct Materials Used
$ 65,000
$ 10,500
$ 9,000
$ 15,000
$ 15,000
Factory Overhead Applied
$ 12,000
Operating Income
$ 14,000
Direct Materials Inventory, Beginning
$ 11,000
Direct Materials Inventory, Ending
$ 6,000
Cost of Goods Manufactured
$ 60,000
Direct labor costs incurred during the period amounted to 1.5 times the
factory overhead. The CFO of Fisher, Inc. has asked you to recalculate
the following accounts and to report to him by the end of the day.
What is the amount of direct materials purchased?
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