Tonga Toys manufactures and distributes a number of products to retailers. One o
ID: 2373206 • Letter: T
Question
Tonga Toys manufactures and distributes a number of products to retailers. One of these products, Playclay, requires two pounds of material A135 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter%u2014July, August, and September. Peak sales of Playclay occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements:
The raw materials inventory on hand at the end of each month must be equal to one-half of the following month%u2019s production needs for raw materials. The raw materials inventory on June 30 for material A135 is budgeted to be 48,700 pounds.
Prepare a direct materials budget showing the quantity of material A135 to be purchased for July, August, and September and for the quarter in total. (Input all amounts as positive values. Do not round intermediate calculations.)
Tonga Toys manufactures and distributes a number of products to retailers. One of these products, Playclay, requires two pounds of material A135 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter%u2014July, August, and September. Peak sales of Playclay occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements:
Explanation / Answer
Direct Material Budget July August September Third Quarter Production Need 92000 112000 152000 356000 Add Ending Inventory 56000 76000 41000 41000 Total Material A135 needed 148000 188000 193000 397000 Deduct Beginning Inventory 48700 56000 76000 48700 Material A135 purchases 99300 132000 117000 348300