Chapter 9 Prac Probs ACC202 - Problem915(45minutes 1...

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Problem 9-15  (45 minutes) 1. Production budget: July August Septem- ber October Budgeted sales (units) ............ 35,000 40,000 50,000 30,000 Add desired ending inventory. 11,000 13,000     9,000         7,000     Total needs ............................. 46,000 53,000 59,000 37,000 Less beginning inventory ........ 10,000 11,000 13,000     9,000     Required production ............... 36,000 42,000 46,000 28,000 2. During July and August the company is building inventories in  anticipation of peak sales in September. Therefore, production exceeds  sales during these months. In September and October inventories are  being reduced in anticipation of a decrease in sales during the last  months of the year. Therefore, production is less than sales during these  months to cut back on inventory levels. 3. Direct materials budget: July August Septem- ber Third Quarter Required production (units) .... 36,000 42,000 46,000 124,000 Material H300 needed per unit   ×        3 cc       ×        3 cc       ×        3 cc       ×        3 cc     Production needs (cc) ............. 108,000 126,000 138,000

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