Production, direct materials, and direct labor budgets Gerrad Manufacturing has projected sales of its product for the n
Posted: Sun Jul 03, 2022 1:16 pm
Production, direct materials, and direct laborbudgetsGerrad Manufacturing has projected sales of its product for thenext six months as follows:
The finished product requires 3 pounds of raw material and 10hours of direct labor.Gerrad tries to maintain a Finished Goods ending inventory equal tothe next two months of sales and a Raw Material ending inventoryequal to one-half of the current month’s production needs.January’s beginning inventories are expected to conform to companypolicy.
b. Prepare a forecast of the units and cost of rawmaterial that will be required for February, March, and April. Theexpected cost per pound of raw material is expected to be $2 inFebruary, $2.30 in March, and $2.40 in April.
The finished product requires 3 pounds of raw material and 10hours of direct labor.Gerrad tries to maintain a Finished Goods ending inventory equal tothe next two months of sales and a Raw Material ending inventoryequal to one-half of the current month’s production needs.January’s beginning inventories are expected to conform to companypolicy.
b. Prepare a forecast of the units and cost of rawmaterial that will be required for February, March, and April. Theexpected cost per pound of raw material is expected to be $2 inFebruary, $2.30 in March, and $2.40 in April.