Grainger Manufacturing Inc.produces outdoor grills.On 31 March,the company had 120 grills in inventory.The company's policy is to maintain a grill inventory equal to 15 per cent of next month's sales.The company expects the following sales activity for the second quarter of the year:
$\begin{array}{lr}
\text { April } & 800 \text { units } \
\text { May } & 2000 \text { units } \
\text { June } & 2600 \text { units }
\end{array}$
Sales for July and August are expected to be 1800 units and 1400 units,respectively.Each completed unit of finished product requires 3 kilos of a heat resistant plastic material which costs $4.00 per kilo.The company has determined that it needs 20 per cent of next month's raw material needs on hand at the end of each month.The company had 600 kilos of plastic on hand at the end of March.
Required: A. Prepare a production budget far the second quarter of the year.
B. Prepare a budiget far the second quarter of the year showing the prajected cost of the direct materials (plastic) that will be needed.

Question

Grainger Manufacturing Inc.produces outdoor grills.On 31 March,the company had 120 grills in inventory.The company's policy is to maintain a grill inventory equal to 15 per cent of next month's sales.The company expects the following sales activity for the second quarter of the year:
$\begin{array}{lr}
\text { April } & 800 \text { units } \
\text { May } & 2000 \text { units } \
\text { June } & 2600 \text { units }
\end{array}$  
Sales for July and August are expected to be 1800 units and 1400 units,respectively.Each completed unit of finished product requires 3 kilos of a heat resistant plastic material which costs $4.00 per kilo.The company has determined that it needs 20 per cent of next month's raw material needs on hand at the end of each month.The company had 600 kilos of plastic on hand at the end of March.
Required: A. Prepare a production budget far the second quarter of the year.
B. Prepare a budiget far the second quarter of the year showing the prajected cost of the direct materials (plastic) that will be needed.

Quizplus · Accepted Answer

The Answer of Grainger Manufacturing Inc.produces outdoor grills.On 31 March,the company had 120 grills in inventory.The company's policy is to maintain a grill inventory equal to 15 per cent of next month's sales.The company expects the following sales activity for the second quarter of the year:
$\begin{array}{lr}
\text { April } & 800 \text { units } \
\text { May } & 2000 \text { units } \
\text { June } & 2600 \text { units }
\end{array}$  
Sales for July and August are expected to be 1800 units and 1400 units,respectively.Each completed unit of finished product requires 3 kilos of a heat resistant plastic material which costs $4.00 per kilo.The company has determined that it needs 20 per cent of next month's raw material needs on hand at the end of each month.The company had 600 kilos of plastic on hand at the end of March.
Required: A. Prepare a production budget far the second quarter of the year.
B. Prepare a budiget far the second quarter of the year showing the prajected cost of the direct materials (plastic) that will be needed.

Grainger Manufacturing Inc April 800 units May 2000 units June 2600 units \begin{array}{lr}\text { April } & 800 \text { units } \\\text { May } & 2000 \text { units } \\\text { June } & 2600 \text { units }\end{array} April May June ​800 units 2000 units 2600 units ​

Grainger Manufacturing Inc $\begin{array}{lr}\text { April } & 800 \text { units } \\\text { May } & 2000 \text { units } \\\text { June } & 2600 \text { units }\end{array}$