9. ABC has developed a very powerful electronic calculator. Each calculator requires five small chips that...
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9. ABC has developed a very powerful electronic calculator. Each calculator requires five small "chips" that cost $10 each and are purchased from an overseas supplier. Micro Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3, as shown below: Year 2 Year 3 First First Fourth Budgeted production, in calculators 10,000 Second 20,000 Third 30,000 40,000 50,000 The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of chips at the end of a quarter must equal 30% of the following quarter's production needs. A total of 10,000 chips will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for chips, by quarter and in total, for Year 2. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Quarter-Year 2 Second Third First Fourth Second Fourth First Year 2 Third Year 9. ABC has developed a very powerful electronic calculator. Each calculator requires five small "chips" that cost $10 each and are purchased from an overseas supplier. Micro Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3, as shown below: Year 2 Year 3 First First Fourth Budgeted production, in calculators 10,000 Second 20,000 Third 30,000 40,000 50,000 The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of chips at the end of a quarter must equal 30% of the following quarter's production needs. A total of 10,000 chips will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for chips, by quarter and in total, for Year 2. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Quarter-Year 2 Second Third First Fourth Second Fourth First Year 2 Third Year
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Particulars Budgeted Production in calculators Opening Stock No of chips required for same Quarter Q... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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