Prepare a direct materials purchases budget, Financial Accounting

Question:

Mosman Ltd produces a single product. The projected sales for the first month of the coming year and the beginning and ending inventory data are as follows:

Sales

80,000 units

Unit price

$12

Beginning inventory

6,000 units

Desired ending inventory

9,000 units

Each unit requires three kilograms of material costing $2 per kilogram. The beginning inventory of raw materials is 2,500 kilograms, and the company wants to have 4,500 kilograms of material in inventory at the end of the month. Each unit requires one hour of direct labour time, which is billed at $8 per hour.

(A) Prepare a production budget for the first month.

(B) Prepare a direct materials purchases budget for the first month in kilograms and dollars.

(C) With which estimate does budgeting begin? Explain why this is so and provide examples to illustrate your understanding.

Posted Date: 2/18/2013 4:50:50 AM | Location : United States







Related Discussions:- Prepare a direct materials purchases budget, Assignment Help, Ask Question on Prepare a direct materials purchases budget, Get Answer, Expert's Help, Prepare a direct materials purchases budget Discussions

Write discussion on Prepare a direct materials purchases budget
Your posts are moderated
Related Questions
Illustration of Bankruptcy Njuguna Mwandawiro, carrying on a business as a trader in Likoni, Mombasa, finds himself insolvent, and on 15 August 1997 files his petition in bankr

The management of Gimenez Corporation is investigating an investment in equipment that would have a useful life of 7 years. The company uses a discount rate of 17% in its capital b

Q. Capital asset pricing model to estimate a project? CAPM could have been utilized to estimate a project - specific Ke if the project activities were different from that of th

ABC Analysis: ABC that is Always Better Control analysis is an application of the principle of 'Management by Exception' to the field of inventory control. If we seem at the in

The following details are taken from the accounting records of the company as at 30 June 2010: Debit Credit Sales revenue 49,950,000

Change in profit sharing ratio When there is a change in profit sharing ratio, it means that some of the partners will get higher profits based on the new ratios in the future wh

Baruch Lev, who is a professor of accounting at New York University and a globally known academic for his research on financial reporting for intangibles, is that the economy has c

Determine the LIFO cost Toys "R" Us purchases inventory in crates of merchandise; each unit of inventory is a crate of toys. The fiscal year of Toys "R" Us ends each January 31


CarloffCremes (CC) planned to sell 40,000 Queen size at $20 each and 20,000 King size at $15 each. Actual sales of the former were 45,000 and 25,000 of the latter, at $19 and $16 r