On January 1, 2017, the Hardin Company budget committee has reached agreement on

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 2017 Sales units: Ending raw materials inventory: Ending finished goods inventory: Third-quarter production: First quarter 5,600; second quarter 6,300; third quarter 7,000 40% of the next quarter's production requirements 25% of the next quarter's expected sales units 7,820 units. The ending raw materials and finished goods inventories at December 31, 2016, follow the same percentage relationships to production and sales that occur in 2017. 5 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound. Prepare a production budget by quarters for the 6-month period ended June 30, 2017 HARDIN COMPANY Production Budget For the Six Months Ending June 30, 2017 Quarter 2 Year Expected Unit Sales Add : Desired Ending Finished Goods Unit Total Required Units Less : Beginning Finished Goods Unit Required Production Units 5600 6300 LINK TO TEXT

Explanation / Answer

Production budget :

Direct material production budget

1 2 Year Sales units 5600 6300 11900 Add:Expected ending inventory 1575   [6300*.25] 1750    [6300*.25] 3325 Total units required 7175 8050 15225 Less:Beginning inventory -1400   [5600*.25] -1575 - 2975 Units to be produced 5775 6475 12250

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