Carlton Cookie Company Produces a Hand-Processed Gourmet Cookie That Is

question 32

Essay

Carlton Cookie Company produces a hand-processed gourmet cookie that is made with organic sugar.Five (5)pounds of organic sugar are required per batch of gourmet cookies.The organic sugar costs $2.40 per pound.The company needs to have 20% of the following month's production needs of organic sugar in ending inventory so it is on hand to start each month.A total of 120 pounds of organic sugar are expected to be on hand on April 1.
1.Budgeted production of the gourmet cookies for the first four months of the upcoming year is as follows:

Required:
Prepare a direct materials budget for organic sugar for each of the months in the second quarter and for the second quarter in total.Include both the quantity of sugar to be purchased and the cost of the purchases in each month.

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Definitions:

Expenses

Costs incurred in the operation of a business or the execution of a task.

Trust Accounts

Financial accounts held by a trustee for the benefit of a third party according to the terms of a trust agreement.

Gross Earnings

The total amount of money earned by an individual or company before any deductions such as taxes or benefits.

Income Taxes

Taxes levied by a government directly on income, both earned (salaries, wages, commissions) and unearned (dividends, interest, rents).