Question

per Cute Company dereits ending materials inventory tagal 40% of the next month's Culver Company's sales but wetsuit sales of 192 of 10 500 units in January 12 200 units in February and 13.00 units in March, Fach unit of part 1987 requires 4 pounds of materials which cost production requirements, and its ending ished goods inventory taal of the next month' spected unit sales. These a re met at December 31 2016 Your Arms Correct Ansar - Your answer is partially correct Prepare a production budget for January and February 2017 0 12900 CULVER COMPANY Production Budget For the Month Ending January 31, 2017 January Expected Unit Sales Add :: Desired Ending Finished Goods Inventory 9 Total Required Units Lesse Beginning Finished Goods Twentory Required Production Units 10500 2580 13000 2100 13090 eTextbook and Media Solution Attempts: 3 of 3 use Prepare a direct materials budeet for January 2017 CULVER COMPANY Direct Materials Budget

Answer 1

(a)
CULVER COMPANY
Production Budget
For the month ending February 31, 2017
	January	February
Expected unit sales	10500	12900
Add : Desired ending finished goods inventory ( 20% * next month's expected unit sales )	2580	2760
Total required units	13080	15660
Less : Beginning finished goods inventory	2100	2580
Required production in units	10980	13080

Note : Beginning finished goods inventory for January = Ending finished goods inventory of December = 20% * January expected unit sales = 20% * 10500

2100

(b)
CULVER COMPANY
Production Budget
For the month ending February 31, 2017
	January
Required production in units	10980
Materials requirements per unit (lbs.)	4
Materials needed for production (lbs.)	43920
Add : Budgeted ending inventory (lbs.) [ 40% of next month's materials requirement = 40% * ( 13080 * 4 ) ]	20928
Total materials requirement (lbs.)	64848
Less : Budgeted beginning inventory (lbs.)	17568
Materials to be purchased	47280
Direct material cost per lb.	$                                        5
Total budgeted direct materials	$                           236,400

Note : Beginning raw materials inventory for January = Ending raw materials inventory of December = 40% * Production requirement of January = 40% * 43920

17568