Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending inventory for the first quarter will be 75,000 units. The following unit sales of the trans-missions are expected during the rest of the year: second quarter, 450,000 units; third quarter, 525,000 units; and fourth quarter, 475,000 units. Company policy calls for the ending inventory of a quarter to equal 20% of the next quarter’s budgeted sales. Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture.
Answer to relevant QuestionsRefer to information from Exercise 22-8. Each transmission requires 0.80 pounds of a key raw material. Electro Company aims to end each quarter with an ending inventory of direct materials equal to 50% of next quarter’s ...Foyert Corp. requires a minimum $ 30,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash ...Render Co. CPA is preparing activity- based budgets for 2013. The partners expect the firm to generate bill-able hours for the year as follows:Data entry . . . . . . . . . 2,200 hoursAuditing . . . . . . . . . . . 4,800 ...Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company’s management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June 30 of the current year ...Adria Lopez expects second quarter 2014 sales of her new line of computer furniture to be the same as the first quarter’s sales (reported below) without any changes in strategy. Monthly sales averaged 40 desk units (sales ...
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