Rakesh Johnson Inc. produces leather handbags. Johnson Inc. estimates it will use 3,700 square meters of leather in production in August, and 3,900 square meters of leather in production inSeptember. Johnson Inc.'s leather inventory policy is 30% of next month's production needs. What will leather purchases be in August?Multiple Choice3,760 square meters4,870 square meters3,700 square meters3,640 square meters

This shows the quantity of materials to be purchased during the budget period. The purchase budget…

Answered: Johnson Inc. produces leather handbags.…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 5EB: Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and...

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Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?
If the sales forecast estimates that 50,000 units of product will be sold during the following year, should the factory plan on manufacturing 50,000 units in the coming year? Explain.
Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and 11,500 in April. Each sandal requires 1.2 yards if material, which costs $3.00 per yard. The companys policy is to have enough material on hand to equal 15% of next months production needs and to maintain a finished goods inventory equal to 20% of the next months production needs. What is the budgeted cost of purchases for March?
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottiss current inventory policy. Is this the minimum cost? Why or why not?
Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The companys policy is to have enough material on hand to equal 10% of the next months production needs and to maintain a finished goods inventory equal to 25% of the next months production needs. What is the budgeted cost of purchases for March?
One Device makes universal remote controls and expects to sell 500 units in January, 800 in February, 450 in March, 550 in April, and 600 in May. The required ending inventory is 20% of the next months sales. Prepare a production budget for the first four months of the year.
Trumbull Co. plans to produce 100,000 toy cars during September. Planned production for October is 125,000 cars. Sales are forecasted at 90,000 toy cars for September and 120,000 toy cars for October. Each toy car requires four wheels. Trumbulls policy is to maintain 10 percent of the next months production in inventory at the end of a month. How many wheels should Tram bull purchase during September? a. 195,000 b. 112,500 c. 102,500 d. 410,000
Abc retailing company prices it's products by adding 30% to its cost.abc anticipates sales of $ 715000 in July. $728000 in August & $ 624000 in September. Abc policy is to have on hand enough inventory at the end of the month to cover 25% of the next month's sales.what will be the cost of the inventory that abc should budget for purchase in August?
Hannon Retailing Company prices its products by adding 30% to its cost. Hannon anticipates sales of $715,000 in July, $728,000 in August, and $624,000 in September. Hannon’s policy is to have on hand enough inventory at the end of the month to cover 25% of the next month’s sales. What will be the cost of the inventory that Hannon should budget for purchase in August?a. $509,600b. $540,000c. $565,000d. $680,000
Johnson Inc. produces leather handbags. Johnson Inc. estimates it will use 4,100 square meters of leather in production in August, and 4,500 square meters of leather in production in September. Johnson Inc.'s leather inventory policy is 40% of next month's production needs. What will leather purchases be in August? Multiple Choice 5,900 square meters 4,100 square meters 3,940 square meters 4,260 square meters
Lee Retailing Company prices its products by adding 30% to its cost. Lee anticipates sales of $1,072,500 in July, $1,092,000 in August, and $936,000 in September. Lee's policy is to have on hard enough invertory at the end of the month to cover 25% of the next month's sales. What will be the cost of the inventory that Lee should budget for purchase in August? Select one: O O O a. $840,000 b. $810,000 c. $1,020,000 d. $764,400

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