Hayes Company
Inadequate inventories could result in temporary shutdowns of production. Because of its close proximity to suppliers,
Hayes Company maintains an ending inventory of raw materials equal to 10% of the next quarter’s production requirements.
The manufacture of each Kitchen Mate requires 2 pounds of raw materials, and the expected cost per pound is $4.
Assume that the desired ending direct materials amount is 1,020 pounds for the fourth quarter of 2011.
Prepare a Direct Materials Budget.
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HAYES COMPANY Sales Budget For the Year Ending December 31,2011 |
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Quarter |
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|
1 |
2 |
3 |
4 |
Year |
|
Expected unit sales |
3,000 |
3,500 |
4,000 |
4,500 |
15,000 |
|
Unit Selling price |
×$60 |
×$60 |
×$60 |
×$60 |
×$60 |
|
Total sales |
$180,000 |
$210,000 |
$240,000 |
$270,000 |
$900,000 |