Transitioning from employee to manager has been exciting for Matthew! He enjoys having the responsibility and authority to make decisions, and it is rewarding to join the management team, sharing insights to make better decisions. One of his first responsibilities is to address the DM purchases budget. The company has a strong relationship with its current supplier, but the quality of the supplier's DM has declined. Knowing this, Matthew has already reached out to a different vendor to see what kind of a deal it might offer. The DM information for Matthew's division and for each vendor just described is as follows. ● ● ● ● ● (a) DM on hand as of July 1 slightly exceeds expectations at 1,580 linear board feet. Each unit requires 4 linear board feet; Matthew is most comfortable if the company has 20% of the following month's production needs on hand. The cost per linear foot is $5.50 with the current supplier; it's $6.00 with the new vendor. Planned production for July is 1,900 units; for August is 2,000 units; for September is 2,000 units; and for October is 1,600 units. The A/P balance related to June DM purchases is $34,125 on July 1. Prepare the DM purchases budget for the third quarter, assuming Matthew stays with the current supplier. Specify amounts for each month and for the quarter overall. (Round DM cost per linear foot to 2 decimal places, e.g. 15.25.) July August
Transitioning from employee to manager has been exciting for Matthew! He enjoys having the responsibility and authority to make decisions, and it is rewarding to join the management team, sharing insights to make better decisions. One of his first responsibilities is to address the DM purchases budget. The company has a strong relationship with its current supplier, but the quality of the supplier's DM has declined. Knowing this, Matthew has already reached out to a different vendor to see what kind of a deal it might offer. The DM information for Matthew's division and for each vendor just described is as follows. ● ● ● ● ● (a) DM on hand as of July 1 slightly exceeds expectations at 1,580 linear board feet. Each unit requires 4 linear board feet; Matthew is most comfortable if the company has 20% of the following month's production needs on hand. The cost per linear foot is $5.50 with the current supplier; it's $6.00 with the new vendor. Planned production for July is 1,900 units; for August is 2,000 units; for September is 2,000 units; and for October is 1,600 units. The A/P balance related to June DM purchases is $34,125 on July 1. Prepare the DM purchases budget for the third quarter, assuming Matthew stays with the current supplier. Specify amounts for each month and for the quarter overall. (Round DM cost per linear foot to 2 decimal places, e.g. 15.25.) July August
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Transitioning from employee to manager has been exciting for Matthew! He enjoys having the responsibility and authority to make
decisions, and it is rewarding to join the management team, sharing insights to make better decisions. One of his first responsibilities
is to address the DM purchases budget. The company has a strong relationship with its current supplier, but the quality of the
supplier's DM has declined. Knowing this, Matthew has already reached out to a different vendor to see what kind of a deal it might
offer. The DM information for Matthew's division and for each vendor just described is as follows.
●
●
●
●
●
(a)
DM on hand as of July 1 slightly exceeds expectations at 1,580 linear board feet.
Each unit requires 4 linear board feet; Matthew is most comfortable if the company has 20% of the following month's
production needs on hand.
The cost per linear foot is $5.50 with the current supplier; it's $6.00 with the new vendor.
Planned production for July is 1,900 units; for August is 2,000 units; for September is 2,000 units; and for October is 1,600
units.
The A/P balance related to June DM purchases is $34,125 on July 1.
Prepare the DM purchases budget for the third quarter, assuming Matthew stays with the current supplier. Specify amounts for
each month and for the quarter overall. (Round DM cost per linear foot to 2 decimal places, e.g. 15.25.)
July
August
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