Answer Happy

Production, direct materials, and direct labor budgets Gerrad Manufacturing has projected sales of its product for the next six months as follows: January February 1120 units March 1,500 units 1440 units 1640 units 490 units April May June The finished product requires 3 pounds of raw material and 10 hours of direct labor. Gerrad tries to maintain a Finished Goods ending inventory equal to the next two months of sales and a Raw Material ending inventory equal to one-half of the current month's production needs. January's beginning inventories are expected to conform to company policy. a Prepare a production budget for February, March, and April. Note: Use a negative sign in your schedule to indicate that an amount is subtracted. February March Sales Total units needed Ell Units produced 1,120 ✓ 3.040 ✓ 4,160✔ (2.720) ✔ 1,440✔ 1,600✔ 2,080✔ 3,680 ✔ (3,040) ✔ 640✔ Required raw material units Cost of raw material purchases $ February April b. Prepare a forecast of the units and cost of raw material that will be required for February, March, and April. The expected cost per pound of raw material is expected to be $2 in February, $2.30 in March, and $2.40 in April. 5,680 x 11,360 x $ 1,440 1,120 ✔ 2,560✔ (2,080) ✔ 480 March 720 1,656 $ April 1,200✔ 2,880 ✔ 9:46
Units produced b. Prepare a forecast of the units and cost of raw material that will be required for February, March, and April. The expected cost per pound of raw material is expected to be $2 in February, $2.30 in March, and $2.40 in April. Required raw material units Cost of raw material purchases $ Units produced DLMS per unit Total hours Cost per DLH Cost of DL S S February 10✔ c. Prepare a direct labor budget (assuming a $12 per hour rate) for February, March, and April. February March April 8680 X 11.30 N S 14400 12 - S 172,800 $ 640✔ 10 ✓ 6,400✔ 12 76,800 March S $ 720 1.656$ 480 April 1,200 2,880 10 ✓ 4,800✔ 12 ✔ 57,600 ✓