Sheds Ahead Ltd produces outdoor sheds for domestic use. The manager in charge of production has been

Question:

Sheds Ahead Ltd produces outdoor sheds for domestic use. The manager in charge of production has been asked to prepare a production budget, a direct materials budget and a direct labour budget for part of 2025 based on the company’s sales forecast.

The materials and labour requirements per shed are as follows.

image text in transcribed

The business requires a finished goods ending inventory for each quarter that equals 40% of expected sales for the next quarter. Also, the ending inventory balance of direct materials should equal 25% of the next quarter’s production requirements. The inventory balances on 1 January 2025 are forecast as shown below.image text in transcribed

Required

(a) Prepare a quarterly production budget, in units only, for the first three quarters of 2025.

(b) Prepare a direct materials budget for the first two quarters of 2025 in both units and dollars.

(c) Prepare a direct labour budget for the first two quarters of 2025.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting

ISBN: 9780730382737

11th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie

Question Posted: