Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 16,500 units plus 10% of the next month's sales. The finished goods inventory on March 31 is budgeted to be 25,000 units. b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 98,500 components. c. The company maintains no work in process inventories. A sales budget for the All Weather speaker is as follows: April May June July August Budgeted Sales in Units 124,000 143,000 220,000 120,000 58,100 Required: 1. Prepare a production budget for the All Weather for April, May, June and July. Budgeted sales (units) Total needs Required production April May June July 2. Prepare a direct materials purchases budget showing the quantity of XL 12 components to be purchased for April, May and June and for the quarter in total. Required production (units) XL 12 components needed per unit Production needs Total XL 12 needs Material XL 12 purchases Second April May June Quarter
Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 16,500 units plus 10% of the next month's sales. The finished goods inventory on March 31 is budgeted to be 25,000 units. b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 98,500 components. c. The company maintains no work in process inventories. A sales budget for the All Weather speaker is as follows: April May June July August Budgeted Sales in Units 124,000 143,000 220,000 120,000 58,100 Required: 1. Prepare a production budget for the All Weather for April, May, June and July. Budgeted sales (units) Total needs Required production April May June July 2. Prepare a direct materials purchases budget showing the quantity of XL 12 components to be purchased for April, May and June and for the quarter in total. Required production (units) XL 12 components needed per unit Production needs Total XL 12 needs Material XL 12 purchases Second April May June Quarter
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather
and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales
of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has
the following inventory requirements:
a. The finished goods inventory on hand at the end of each month must be equal to 16,500 units plus 10% of the next month's sales.
The finished goods inventory on March 31 is budgeted to be 25,000 units.
b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for
raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 98,500 components.
c. The company maintains no work in process inventories.
A sales budget for the All Weather speaker is as follows:
April
May
June
July
August
Budgeted Sales in Units
124,000
143,000
220,000
120,000
58,100
Required:
1. Prepare a production budget for the All Weather for April, May, June and July.
Budgeted sales (units)
Total needs
Required production
April
May
June
July
Transcribed Image Text:2. Prepare a direct materials purchases budget showing the quantity of XL 12 components to be purchased for April, May and June
and for the quarter in total.
Required production (units)
XL 12 components needed per unit
Production needs
Total XL 12 needs
Material XL 12 purchases
Second
April
May
June
Quarter
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