Question

l

Exercise 9-6 (Part Level Submission) (Video) On January 1, 2020, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2020. Sales units: First quarter 5,000; second quarter 6,900; third quarter 7,300. Ending raw materials inventory: 40% of the next quarter's production requirements. Ending finished goods inventory: 25% of the next quarter's expected sales units. Third-quarter production: 7,360 units. The ending raw materials and finished goods inventories at December 31, 2019, follow the same percentage relationships to production and sales that occur in 2020. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $6 per pound. (a) Prepare a production budget by quarters for the 6-month period ended June 30, 2020. HARDIN COMPANY Production Budget Quarter Months

b. prepare a direct materails by quareters for 6 month period.

Answer 1

Hardin company

Production Budget

for the six months ending june 30 2020.

	quarter 1	quarter 2	six months
sales units	5000	6900
add:desired ending inventory (25%*6900) (25%*7300)	1,725	1,825
total units required	6,725	7,825
less:beginning inventory (ending inventory of previous month) or (25% of current quarter sales)	(1,250)	(1,725)
units to be produced	5,475	6,100	11,575

b. direct materials budget:

	1 quarter	2 quarter	six months
units to be produced	5,475	6,100
direct materials per unit	3	3
total pounds required	16,425	18,300
add: desired ending direct materials (40%*18,300) (40%*7360*3 pounds)	7,320	8,832
total materials required	23,745	27,132
less:beginning direct materials (40% of current quarter pounds required)	(6,570)	(7,320)
direct material purchases	17,175	19,812
cost per pound	$6	$6
total cost of direct materials	$103,050	$118,872	$221,922