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. Sales units: Ending raw materials inventory: 40% of the next quarter's production requirements Ending finished goods inventory: 25% of the next quarter's expected sales units Third-quarter production: First quarter 5,300; second quarter 6,000; third quarter 7,800 7,360 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. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound (a) Prepare a production budget by quarters for the 6-month period ended June 30, 2017. HARDIN COMPANY Production Budget Quarter Six Months

Explanation / Answer

HARDIN COMPANY Production Budget For the month of JUN 30 Quarter 1 Quarter 2 Six Month Expected Unit Sales              5,300               6,000             11,300 Add : Desired Ending FG Units              1,500               1,950               3,450 Total Needed              6,800               7,950             14,750 Less : Begning FG Units              1,325               1,500               2,825 Unit to be Produced              5,475               6,450             11,925

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