Reference no: EM131591527
Question -
On January 1, 2017, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2017.
Sales unit: First quarter 6,000; second quarter 6,900; third quarter 7,400
Ending law materials inventory: 40% of the next quarter's production requirements
Ending finished goods inventory: 25% of the next quarter's expected sales units
Third-quarter production: 7,840 units
The ending law materials and finished goods inventories at December 31, 2016, follow the same percentage relationships to production and sales that occur in 2017. 4 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $5 per pound.
a) Prepare a production budget by quarters for the 6-month period ended June 30, 2017.
b) Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2017.
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