O'Reilly Outfitters Inc.has forecasted sales of 32,000 tents for the upcoming year.The anticipated finished goods inventory at January 1 is 5,000 units,but management desires this inventory level to be reduced by 20% on December 31.
Two materials are used in the production of tents: 36 square yards of nylon having a standard cost of $2.00 per yard,and 20 feet of metal tubing having a standard cost of $.50 per linear foot.Raw material inventory information is as follows: (1)Prepare a production budget for the upcoming year.
(2)Prepare a direct materials budget for the upcoming year.

Question

O'Reilly Outfitters Inc.has forecasted sales of 32,000 tents for the upcoming year.The anticipated finished goods inventory at January 1 is 5,000 units,but management desires this inventory level to be reduced by 20% on December 31.
Two materials are used in the production of tents: 36 square yards of nylon having a standard cost of $2.00 per yard,and 20 feet of metal tubing having a standard cost of $.50 per linear foot.Raw material inventory information is as follows:  (1)Prepare a production budget for the upcoming year.
(2)Prepare a direct materials budget for the upcoming year.

Quizplus · Accepted Answer

The Answer of O'Reilly Outfitters Inc.has forecasted sales of 32,000 tents for the upcoming year.The anticipated finished goods inventory at January 1 is 5,000 units,but management desires this inventory level to be reduced by 20% on December 31.
Two materials are used in the production of tents: 36 square yards of nylon having a standard cost of $2.00 per yard,and 20 feet of metal tubing having a standard cost of $.50 per linear foot.Raw material inventory information is as follows:  (1)Prepare a production budget for the upcoming year.
(2)Prepare a direct materials budget for the upcoming year.