Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products, SuperStick, requires five kilograms of material D236 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter-July, August, and September. Peak sales of SuperStick occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 9,000 units plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 23,200 units. b. The raw materials inventory on hand at the end of each month must be equal to 40% of the following month's production needs for raw materials. The raw materials inventory on June 30 for material D236 is budgeted to be 133,000 kilograms. c. The company maintains no work in process inventories. A sales budget for SuperStick for the last six months of the year follows: Budgeted Sales in Units 62,000 76,000 107,000 54,000 31,000 15,400 July August September October November December
Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products, SuperStick, requires five kilograms of material D236 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter-July, August, and September. Peak sales of SuperStick occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 9,000 units plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 23,200 units. b. The raw materials inventory on hand at the end of each month must be equal to 40% of the following month's production needs for raw materials. The raw materials inventory on June 30 for material D236 is budgeted to be 133,000 kilograms. c. The company maintains no work in process inventories. A sales budget for SuperStick for the last six months of the year follows: Budgeted Sales in Units 62,000 76,000 107,000 54,000 31,000 15,400 July August September October November December
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 1MAD: Dura-Conduit Corporation manufactures plastic conduit that is used in the cable industry. A conduit...
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