Ingles Corporation is a manufacturer of tables. The table tops are manufactured
ID: 2537023 • Letter: I
Question
Ingles Corporation is a manufacturer of tables. The table tops are manufactured by Ingles, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 16 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40 percent of next month’s sales are in the current month’s finished goods inventory. Ingles also purchases sufficient materials to ensure that the current month’s ending materials inventory is 60 percent of the following month’s direct materials required for production. Ingle’s sales budget in units for the next quarter is as follows:
The cost of each table leg is $10
The tables to be produced in September are 2,100 (the same as the units sold for that month)
July........................................................................................................ 2,450
August.................................................................................................. 2,900
September............................................................................................. 2,100
Ingle’s ending inventories in units for July 31 are as follows:
Finished goods...................................................................................... 1,900
Materials (legs)...................................................................................... 4,000
Requirements:
Prepare Ingle’s production budget for tables in August.
Prepare Ingle’s August direct materials purchases budget for table legs.
How many employees will be required for the Assembly Department in August?Fractional employees are acceptable since employees can be hired on a part-time basis.Assume a 40-hour week and a 4-week month.
Explanation / Answer
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Note:- For Knowing Required legs for current month, we have to multiply with 4 to the production of the month.
Employees required for assembling department for the month of August
Production for a month by each labour = (40 hours * 60 minutes * 4 weeks) / 16 minutes = 600 chairs
Total production required = 2580
Number of employees required = 2580 / 600 = 4.3 labours
Ingle’s production budget for tables in August A B C S.no Particulars July August September 1 Budgeted Production 2,450.00 2,900.00 2,100.00 Opening Stock 2 Finished Goods 1,900.00 1,160.00 840.00 3=1-2 Produce for current month 550.00 1,740.00 1,260.00 4=1C*40% Produce for next month 1,160.00 840.00 - Production 1,710.00 2,580.00 1,260.00 Ingle’s August direct materials purchases budget for table legs A B C S.no Particulars July August September Purchases 1 Required for current month 6,840.00 10,320.00 5,040.00 2 Opening stock (4,000.00) (1,740.00) (1,260.00) 3=1C*60% For next month production 6,192.00 3,024.00-