MUMFORD Company is budgeting for the calendar year 2023. It is forecasted that the company will...
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MUMFORD Company is budgeting for the calendar year 2023. It is forecasted that the company will sell a total of 30,000 bookshelves during 2023 evenly for each quarter. These bookshelves will be sold at a price of $125 per bookshelf, for the first 3 quarters and then the selling price is budgeted to be increased to $145 per bookshelf. Management has a policy to always have 10% of the next quarter's projected sales quantity available in finished goods inventory at the end of each quarter. The primary (direct) material used for the manufacture of these bookshelves is plastic. Each bookshelf requires 5 pounds of plastic. The current cost of plastic is $8 per pound and is expected to remain unchanged for all of 2023. As at January 1, 2023 management expects to have 6,000 pounds of plastic in inventory. Management also desires to have 2,000 pounds of plastic in inventory at the end of 2023 as safety stock. It is forecasted that a total of 9,000 bookshelves will be sold in the first quarter of 2024. Required: Prepare the Direct Materials Budget in dollars for 2023. (Ensure that all parts of your answer are clearly labeled and rounded to 2 decimal places.) MUMFORD Company is budgeting for the calendar year 2023. It is forecasted that the company will sell a total of 30,000 bookshelves during 2023 evenly for each quarter. These bookshelves will be sold at a price of $125 per bookshelf, for the first 3 quarters and then the selling price is budgeted to be increased to $145 per bookshelf. Management has a policy to always have 10% of the next quarter's projected sales quantity available in finished goods inventory at the end of each quarter. The primary (direct) material used for the manufacture of these bookshelves is plastic. Each bookshelf requires 5 pounds of plastic. The current cost of plastic is $8 per pound and is expected to remain unchanged for all of 2023. As at January 1, 2023 management expects to have 6,000 pounds of plastic in inventory. Management also desires to have 2,000 pounds of plastic in inventory at the end of 2023 as safety stock. It is forecasted that a total of 9,000 bookshelves will be sold in the first quarter of 2024. Required: Prepare the Direct Materials Budget in dollars for 2023. (Ensure that all parts of your answer are clearly labeled and rounded to 2 decimal places.)
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Direct Materials Budget for 2023 Quarter 1 Units Sold 7500 Price per Unit 125 Tota... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
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