Crest Products expects the following sales of its single product: Units 20,400 16,700 September October November...

  

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Crest Products expects the following sales of its single product: Units 20,400 16,700 September October November December January 17,100 23,200 19,400 Required: Crest has an ending finished goods inventory policy of 30% of the next month's sales needs. September 1 inventory is projected to be 7.400 units. Each finished unit requires 2 units of Component X and 3 units of Component Z. August 1 materials inventory includes 3,000 units of Component X and 173,000 units of Component Z. Crest desires to maintain a Component X inventory equal to 10% of next month's production needs and a Component z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31. Crest Products Production Budget For the Quarter Ending December 31 October November Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory December Total b. Prepare a direct materials purchases budget for Component Z for quarter ending December 31. Assume a desired ending inventory for Component Z of 16,000 units at December 31, and a constant unit cost of $4 per lb. Crest Products Direct Materials Purchases Budget (Component Z) For the Quarter Ending December 31 October November Budgeted production (units) Direct materials requirements per unit Total direct material needed Plus: Ending inventory Less: Beginning inventory Total purchases of Component Z Cost of Component Z Budgeted cost of Component Z purchases (10,092) (11,358) December (13,236) $ Total 16,000 10,092 717,352 Crest Products expects the following sales of its single product: Units 20,400 16,700 September October November December January 17,100 23,200 19,400 Required: Crest has an ending finished goods inventory policy of 30% of the next month's sales needs. September 1 inventory is projected to be 7.400 units. Each finished unit requires 2 units of Component X and 3 units of Component Z. August 1 materials inventory includes 3,000 units of Component X and 173,000 units of Component Z. Crest desires to maintain a Component X inventory equal to 10% of next month's production needs and a Component z inventory equal to 20% of next month's production needs. a. Prepare a production budget for Crest for the quarter ending December 31. Crest Products Production Budget For the Quarter Ending December 31 October November Budgeted unit sales Plus: Ending finished goods inventory Less: Beginning finished goods inventory December Total b. Prepare a direct materials purchases budget for Component Z for quarter ending December 31. Assume a desired ending inventory for Component Z of 16,000 units at December 31, and a constant unit cost of $4 per lb. Crest Products Direct Materials Purchases Budget (Component Z) For the Quarter Ending December 31 October November Budgeted production (units) Direct materials requirements per unit Total direct material needed Plus: Ending inventory Less: Beginning inventory Total purchases of Component Z Cost of Component Z Budgeted cost of Component Z purchases (10,092) (11,358) December (13,236) $ Total 16,000 10,092 717,352

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SOLUTION a Production Budget for Crest Products for the Quarter Ending December 31 October Budgeted ... View the full answer