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Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first 3 months of the coming year: January February 41,000 38,000 March 50,000 The average price for a drum is $35. Required: Prepare a sales budget for the first 3 months of the coming year, showing units and sales revenue by month and in total for the quarter.

Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first 3 months of the coming year: January February 41,000 38,000 March 50,000 The average price for a drum is $35. Required: Prepare a sales budget for the first 3 months of the coming year, showing units and sales revenue by month and in total for the quarter.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Chapter 9 Profit Planning and Flexible Budgets BRIEF EXERCISES: SET A Brief Exercise 9-21 Preparing a Sales Budget OBJE Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first 3 months of the coming year: Examp January 41,000 February 38,000 March 50,000 beupe The average price for a drum is $35. Required: Prepare a sales budget for the first 3 months of the coming year, showing units and sales revenue by month and in total for the quarter. Brief Exercise 9-22 Preparing a Production Budget OBJE Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales: Exam 41,000 January February 38,000 March 50,000 April 51,000 Patrick's policy is to have 25% of next month's sales in ending inventory. On January 1, it is ex- pected that there will be 6,700 drums of solvent on hand. Required: Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total.
Transcribed Image Text:Chapter 9 Profit Planning and Flexible Budgets BRIEF EXERCISES: SET A Brief Exercise 9-21 Preparing a Sales Budget OBJE Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first 3 months of the coming year: Examp January 41,000 February 38,000 March 50,000 beupe The average price for a drum is $35. Required: Prepare a sales budget for the first 3 months of the coming year, showing units and sales revenue by month and in total for the quarter. Brief Exercise 9-22 Preparing a Production Budget OBJE Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales: Exam 41,000 January February 38,000 March 50,000 April 51,000 Patrick's policy is to have 25% of next month's sales in ending inventory. On January 1, it is ex- pected that there will be 6,700 drums of solvent on hand. Required: Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total.
Brief Exercise 9-23 Preparing a Direct Materials Purchases Budget OB Exa Patrick Inc. makes industrial solvents sold in 5-gallon drums. Planned production in units for the first 3 months of the coming year is: pef 43,800 January February 41,000 March 50,250 Each drum requires 5.5 gallons of chemicals and one plastic drum. Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost ofone drum is $1.60. (Note: Round all unit amounts to the nearest unit. Round all dollar amounts to the nearest dollar.) Required: 1. Calculate the ending inventory of chemicals in gallons for December of the prior year for January and February. What is the beginning inventory of chemicals for January? 2. Prepare a direct materials purchases budget for chemicals for the months of January and February. 3. Calculate the ending inventory of drums for December of the prior year and for January and February. 4. Prepare a direct materials purchases budget for drums for the months of January and February. and
Transcribed Image Text:Brief Exercise 9-23 Preparing a Direct Materials Purchases Budget OB Exa Patrick Inc. makes industrial solvents sold in 5-gallon drums. Planned production in units for the first 3 months of the coming year is: pef 43,800 January February 41,000 March 50,250 Each drum requires 5.5 gallons of chemicals and one plastic drum. Company policy requires that ending inventories of raw materials for each month be 15% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost ofone drum is $1.60. (Note: Round all unit amounts to the nearest unit. Round all dollar amounts to the nearest dollar.) Required: 1. Calculate the ending inventory of chemicals in gallons for December of the prior year for January and February. What is the beginning inventory of chemicals for January? 2. Prepare a direct materials purchases budget for chemicals for the months of January and February. 3. Calculate the ending inventory of drums for December of the prior year and for January and February. 4. Prepare a direct materials purchases budget for drums for the months of January and February. and
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