Tonga Toys manufactures and distributes a number of products to retailers. One o
ID: 2374625 • 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 finished goods inventory on hand at the end of each month must be equal to 8,000 units plus 33% of the next month%u2019s sales. The finished goods inventory on June 30 is budgeted to be 19,880 units.
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 39,300 pounds.
Prepare a production budget for Playclay for the months July, August, September, and October. (Input all amounts as positive values. Do not round intermediate calculations.)
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
Production Budget July August Sept Oct Nov December Sales(in Unit) 36000 46000 66000 31000 16000 6000 Add: Ending Inventory 23180 29780 18230 13280 9980 8000 Total Need 59180 75780 84230 44280 25980 14000 Deduct: Beginning Inventory 19880 23180 29780 18230 13280 9980 Required Production 39300 52600 54450 26050 12700 4020 Material Budget July August Sept Third Quarter Required Production 39300 52600 54450 146350 Production Need 78600 105200 108900 292700 Add: Ending Inventory 52600 54450 146350 146350 Total Material Need 131200 159650 255250 439050 Deduct: Beginning Inventory 39300 52600 54450 39300 Material Purchases 91900 107050 200800 399750