Author Question: Picture Pretty manufactures picture frames. Sales for August are expected to be 10,000 units of ... (Read 192 times)

naturalchemist · **on:** Mar 6, 2021

Question 1

Perry Company has provided the following information:

Month

Budgeted Sales

March

$200,000

April

212,000

May

204,000

June

218,000

July

210,000

In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month's cost of sales.

Required:
Prepare a purchases budget for April through June.

Question 2

Picture Pretty manufactures picture frames. Sales for August are expected to be 10,000 units of various sizes. Historically, the average frame requires four feet of framing, one square foot of glass, and two square feet of backing. Beginning inventory includes 1,500 feet of framing, 500 square feet of glass, and 500 square feet of backing. Current prices are $0.90 per foot of framing, $8.00 per square foot of glass, and $4 per square foot of backing. Ending inventory of materials should be 150% of beginning inventory. Purchases are paid for in the month acquired.

Required:
a. Determine the quantity of framing, glass, and backing that is to be purchased during August.
b. Determine the total costs of direct materials for August purchases.

Benayers · **Reply #1 on:** Mar 6, 2021

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