Question

Hansell Company's management wants to prepare budgets for one of its products, Duraflex, for July 2019. The firm sells the product for $93 per unit and has the following expected sales (In units) for these months in 2019: Apr May 6,709 May June 6.8ee June July August 9,608 August September September 3,700 8 ,608 The production process requires 4 pounds of Dura-1000 and 2 pounds of Flexplas. The firm's policy is to maintain an ending Inventory each month equal to 10% of the following month's budgeted sales, but in no case less than 500 units. All materials Inventories are to be maintained at 5% of the production needs for the next month, but not to exceed 1.000 pounds. The firm expects all Inventories at the end of June to be within the guidelines. The purchases department expects the materials to cost $1.25 per pound and $5.00 per pound for Dura-1000 and Flexplas, respectively. The production process requires direct labor at two skill levels. The rate for labor at the K102 level is $50 per hour and $20 per hour for the K175 level. The K102 level can process one batch of duraflex per hour, each batch consists of 100 units. The manufacturing of Duraflex also requires one-tenth of an hour of K175 workers' time for each unit manufactured Required: On the basis of the preceding data and projections, prepare the following budgets: a. Sales budget for July (in dollars). b. Production budget for July (in units). c. Production budget for Augustin units). d. Direct materials purchases budget for July (In pounds). e. Direct materials purchases budget for July (in dollars) f. Direct manufacturing labor budget for July (In dollars). Answer is complete but not entirely correct. $ a. b. Sales budget for July (in dollars) Production budget for July (in units) Production budget for August (in units) Direct materials purchases budget for July (in pounds) Direct materials purchases budget for July (in dollars) Direct manufacturing labor budget for July (in dollars) 799,800 8.700 9,180 52,488 129,500 21,750 d. $ $

Please help finding:

d. Direct materials purchases budget for July (in pounds).

e. Direct materials purchases budget for July (in dollars).

Thank you!

Answer 1

	PRODUCTION BUDGET:	April	May	June	July	August	September
	Expected sales in units	3700	6700	6800	8600	9600	5400
	Desired ending inventory of finished goods	670	680	860	960	540
	Total units of FG required	4370	7380	7660	9560	10140
	Less: Begining units of FG	500	670	680	860	960
	Production of FG required in units	3870	6710	6980	8700	9180
	PURCHASES BUDGET:
	DURA-1000:
	Consumption for production in pounds	15480	26840	27920	34800	36720
	Desired ending inventory in pounds	1000	1000	1000	1000
	Total needs in pounds	16480	27840	28920	35800
	Beginning inventory in pounds	774	1000	1000	1000
	Required purchases in pounds	15706	26840	27920	34800
	Purchases in dollars	$       19,633	$        33,550	$      34,900	$       43,500
	FLEXPLAS:
	Consumption for production in pounds	7740	13420	13960	17400	18360
	Desired ending inventory in pounds	671	698	870	918
	Total needs in pounds	8411	14118	14830	18318
	Beginning inventory in pounds	387	671	698	870
	Required purchases in pounds	8024	13447	14132	17448
	Purchases in dollars	$       40,120	$        67,235	$      70,660	$       87,240
	ANSWERS:
d]	Direct material purchases budget for July in pounds				52248
e]	Direct material purchases budget for July in dollars				$    1,30,740