Ans. 1 | Anderson Manufacturing | |||||
Production Budget | ||||||
For the Months of January through March | ||||||
January | February | March | Quarter | |||
Unit sales | 3,000 | 3,200 | 3,100 | 9,300 | ||
Add: Desired Ending inventory | 800 | 775 | 1050 | 2,625 | ||
Total needs | 3,800 | 3,975 | 4,150 | 11,925 | ||
Less: Beginning inventory | -750 | -800 | -775 | -2,325 | ||
Units to be produced | 3,050 | 3,175 | 3,375 | 9,600 | ||
*Calculations for Ending inventory: | *Calculations for Beginning inventory: | |||||
Months | Months | |||||
January | 3,200 * 25% | 800 | January | (given) | 750 | |
February | 3,100 * 25% | 775 | February | Ending inventory of January | 800 | |
March | 4,200 * 25% | 1050 | March | Ending inventory of February | 775 | |
Beginning finished goods invenotry of current month = Ending inventory of previous month | ||||||
Ans. 2 | Anderson Manufacturing | |||||
Production Budget | ||||||
For the Months of January through March | ||||||
January | February | March | Quarter | |||
Budgeted production (units) | 3,050 | 3,175 | 3,375 | 9,600 | ||
(X) Materials requirement per unit | 2 | 2 | 2 | 2 | ||
Materials needed for production | 6100 | 6350 | 6750 | 19200 | ||
Add: budgeted ending inventory | 1270 | 1350 | 1660 | 4280 | ||
Total materials requirements | 7370 | 7700 | 8410 | 23480 | ||
Less: Budgeted beginning inventory | -1220 | -1270 | -1350 | -3840 | ||
Materials to be purchased | 6150 | 6430 | 7060 | 19640 | ||
(X) Direct materials per unit | $0.20 | $0.20 | $0.20 | $0.20 | ||
Total budgeted direct materials | $1,230 | $1,286 | $1,412 | $3,928 | ||
*Ending inventory for current quarter = Materials requirements of next quarter * 20% | ||||||
*Beginning inventory for Current quarter = Ending inventory of previous quarter | ||||||
*Calculations for Ending inventory: | *Calculations for Beginning inventory: | |||||
Months | Months | |||||
January | 6,350 * 20% | 1270 | January | (calculted below) | 1220 | |
February | 6,750 * 20% | 1350 | February | Ending inventory of January | 1270 | |
March | 8,300 * 20% | 1660 | March | Ending inventory of February | 1350 | |
Materials needed for production for the Month of April: | ||||||
April | ||||||
Unit sales | 4,200 | |||||
Add: Desired Ending inventory (4,000*25%) | 1000 | |||||
Total needs | 5,200 | |||||
Less: Beginning inventory | -1050 | |||||
Units to be produced | 4,150 | |||||
(X) Materials requirement per unit | 2 | |||||
Materials needed for production | 8,300 | |||||
*Beginning inventory for January = Ending inventory for December = 20% of January month's materials needed for production | ||||||
6,100 * 20% | ||||||
1220 | ||||||
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