Question : BRIEF EXERCISES BE 159 Wynn, Inc. manufactures beanies. The budgeted units to : 1311840

BRIEF EXERCISES

BE 159

Wynn, Inc. manufactures beanies. The budgeted units to be produced and sold are below:

Expected ProductionExpected Sales

August3,5002,900

September2,8003,900

It takes 18 yards of yarn to produce a beanie. The company’s policy is to maintain yarn at the end of each month equal to 5% of next month’s production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month’s anticipated production needs. The cost of yarn is $0.20 a yard. At August 1, 3,150 yards of yarn were on hand.

Instructions

Compute the budgeted cost of purchases.

BE 160

The budget components for Birk Company for the quarter ended June 30 appear below. Birk sells trash cans for $12 each. Budgeted production for the next three months is:

April26,000 units

May46,000 units

June29,000 units

Birk desires to have trash cans on hand at the end of each month equal to 20 percent of the following month’s budgeted sales in units. On March 31, Birk had 4,000 completed units on hand. Five pounds of plastic are required for each trash can. At the end of each month, Birk desires to have 10 percent of the following month’s production material needs on hand. At March 31, Birk had 13,000 pounds of plastic on hand. The materials used in production costs $0.60 per pound. Each trash can produced requires 0.10 hours of direct labor.

Instructions

Compute the cost of the plastic inventory at the end of May.

BE 161

Smoke, Inc. makes and sells buckets. Each bucket uses 1/2 pound of plastic. Budgeted production of buckets in units for the next three months is as follows:

AprilMayJune

Budgeted production21,00022,00024,000

The company wants to maintain monthly ending inventories of plastic equal to 25% of the following month’s budgeted production needs. The cost of plastic is $2.20 per pound.

Instructions

Prepare a direct materials purchases budget for the month of May.

BE 162

The budget components for Park Company for the quarter ended June 30 appear below. Park sells trash cans for $12 each. Budgeted sales and production for the next three months are:

Sales                    Production

April 20,000 units26,000 units

May 50,000 units46,000 units

June 30,000 units29,000 units

Park desires to have trash cans on hand at the end of each month equal to 20 percent of the following month’s budgeted sales in units. On March 31, Park had 4,000 completed units on hand. Five pounds of plastic are required for each trash can. At the end of each month, Park desires to have 10 percent of the following month’s production material needs on hand. At March 31, Park had 13,000 pounds of plastic on hand. The materials used in production cost $0.60 per pound. Each trash can produced requires 0.10 hours of direct labor.

Instructions

Determine how much the materials purchases budget will be for the month ending April 30.

BE 163

Jent Company reported the following information for 2013:

OctoberNovemberDecember

Budgeted sales$320,000$340,000$360,000

Budgeted purchases$120,000$128,000$144,000

?All sales are on credit.

?Customer amounts on account are collected 40% in the month of sale and 60% in the following month.

Instructions

Compute the amount of cash Jent will receive during November.