Refer to Cornerstone Exercise 8 2 for the production budgets for
Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKick’s policy is that 20 percent of the following month’s production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement.
In exercise FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKick’s best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following:
1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year.
2. What if FlashKick decreased the ending inventory percentage to 15 percent of the next month’s production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1?
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