Question

Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2017.

		January		February		March		April		May
Estimated unit sales		10,200		11,300		8,700		9,000		8,800
Sales price per unit		$50.10		$47.20		$47.20		$47.20		$47.20
Direct labor hours per unit		2.1		2.1		1.7		1.7		1.7
Wage per direct labor hour		$8.00		$8.00		$8.00		$9.00		$9.00

Lowell has a labor contract that calls for a wage increase to $9.00 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1.

Lowell expects to begin the year with 18,110 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month’s sales, plus 70% of the second following month’s sales.

Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2017 January February March 8,700 April 9,000 May Estimated unit sales Sales price per unit Direct labor hours per unit Wage per direct labor hour 10,200 $50.10 2.1 $8.00 8,800 $47.20 $47.20 $47.20 $47.20 1.7 $8.00 $8.00 $9.00 $9.00 11,300 2.1 Lowell has a labor contract that calls for a wage increase to $9.00 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1 Lowell expects to begin the year with 18,110 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales, plus 70% of the second following month's sales ▼ (a) Prepare a production budget for Lowell Company by month and for the first quarter of the year LOWELL COMPANY Production Budget Jan Feb Mar Total LINK TO TEXT LINK TO TEXT VIDEO: APPLIED SKILLS Attempts: 0 of 5 usedSAVE FOR LATER SUBMIT ANSWER The parts of this question must be completed in order. This part will be available when you complete the part above

Answer 1

Note- 1: Compute the desired ending inventorv as shown below: Particulars Jan Feb Mar 100% of following month sales 70% of second following month sales (70% x8700 ; 9.000 ; 8.800) 11,3008,7009,000 6,0906,3006,160 17,39015,000 15,160 Desired ending inventory Compute the production budget for L Co. as shown below: Jan Feb Mar Total 10,200 11,300 870030,200 Add desired ending inventory(note-) 17,390 15,000 15,160 15,160 27,590 26,300 23.86045,360 18,110 17,39015,000 18,110 9.480 8.9108.860 27.250 Particulars Sales Total needs Less: Beginning inventory Production (In units) . In total for the quarter, beginning inventory of January is to be considered and the ending inventory of March is to be considered