Daniel Company, a manufacturer, predicts sales of 6,750 units in January, 6,300 units in February, 8,550...

 

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Daniel Company, a manufacturer, predicts sales of 6,750 units in January, 6,300 units in February, 8,550 units in March, and 9,400 units in April. The company wants each month's ending finished goods inventory to equal 50% of next month's predicted unit sales. Beginning finished goods inventory for January is 3,375 units. Each unit of finished goods requires 0.45 pounds of direct materials at a cost of $11.00 per pound, and 3.5 hours of direct labor at a cost of $21 per hour. Additionally, the company wants each month's ending raw materials inventory to equal 20% of next month's budgeted production. Prepare a sales budget, a production budget, a direct materials and a direct labor budget. Daniel Company Budget Assumptions For the months of January, February, and March 2020 January February Selling price per unit Budgeted sales (units) Budgeted sales (units) April Budgeted production (units) April Ratio of ending finished goods inventory to next month's sales Ratio of ending raw materials inventory to next month's requirements Number of units in finished goods inventory, January 1 Number of pounds in raw materials inventory, January 11 Number of pounds of raw materials required per unit Cost per pound of raw materials Number of direct labor hours required per unit Rate per direct labor hour Daniel Company Sales Budget For the months of January, February, and March 2020 January February Budgeted sales (units) Selling price per unit Total budgeted sales (dollars) $160 6,750 Daniel Company Production Budget For the months of January, February, and March 2020 January February Next month's budgeted sales (units) Ratio of inventory to future month's sales Budgeted ending inventory (units) Add: Budgeted sales (units) Required units of available production Deduct: Beginning inventory (units) Budgeted units to produce Daniel Company Direct Materials Budget For the months of January, February, and March 2020 January February Budgeted units to produce Materials requirements per unit Materials needed for production (pounds) Add Budgeted ending inventory (pounds) Total materials requirements (pounds) Deduct: Beginning inventory (pounds) Materials to be purchased (pounds) Material price per pound Total budgeted cost of direct materials purchases $160 6,300 March March March March $160 8,550 9,400 9.900 50% 20% 3,375 587 0.45 $11.00 3.5 $21.00 Daniel Company Direct Labor Budget For the months of January, February, and March 2020 January February Budgeted units to produce Direct labor requirements (hours) per unit Total direct labor hours needed 0 Direct labor rate (per hour) Total budgeted direct labor cost 0 March Daniel Company, a manufacturer, predicts sales of 6,750 units in January, 6,300 units in February, 8,550 units in March, and 9,400 units in April. The company wants each month's ending finished goods inventory to equal 50% of next month's predicted unit sales. Beginning finished goods inventory for January is 3,375 units. Each unit of finished goods requires 0.45 pounds of direct materials at a cost of $11.00 per pound, and 3.5 hours of direct labor at a cost of $21 per hour. Additionally, the company wants each month's ending raw materials inventory to equal 20% of next month's budgeted production. Prepare a sales budget, a production budget, a direct materials and a direct labor budget. Daniel Company Budget Assumptions For the months of January, February, and March 2020 January February Selling price per unit Budgeted sales (units) Budgeted sales (units) April Budgeted production (units) April Ratio of ending finished goods inventory to next month's sales Ratio of ending raw materials inventory to next month's requirements Number of units in finished goods inventory, January 1 Number of pounds in raw materials inventory, January 11 Number of pounds of raw materials required per unit Cost per pound of raw materials Number of direct labor hours required per unit Rate per direct labor hour Daniel Company Sales Budget For the months of January, February, and March 2020 January February Budgeted sales (units) Selling price per unit Total budgeted sales (dollars) $160 6,750 Daniel Company Production Budget For the months of January, February, and March 2020 January February Next month's budgeted sales (units) Ratio of inventory to future month's sales Budgeted ending inventory (units) Add: Budgeted sales (units) Required units of available production Deduct: Beginning inventory (units) Budgeted units to produce Daniel Company Direct Materials Budget For the months of January, February, and March 2020 January February Budgeted units to produce Materials requirements per unit Materials needed for production (pounds) Add Budgeted ending inventory (pounds) Total materials requirements (pounds) Deduct: Beginning inventory (pounds) Materials to be purchased (pounds) Material price per pound Total budgeted cost of direct materials purchases $160 6,300 March March March March $160 8,550 9,400 9.900 50% 20% 3,375 587 0.45 $11.00 3.5 $21.00 Daniel Company Direct Labor Budget For the months of January, February, and March 2020 January February Budgeted units to produce Direct labor requirements (hours) per unit Total direct labor hours needed 0 Direct labor rate (per hour) Total budgeted direct labor cost 0 March

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