A Company Expects to Begin the Coming Year with 6,000

question 77

Essay

A company expects to begin the coming year with 6,000 ceramic pots in finished goods inventory.It expects to sell 85,000 ceramic pots and end the year with 8,000 pots in the finished goods inventory.Four pounds of clay go into each ceramic pot.The company expects to have 4,000 pounds of clay on hand at the beginning of the coming year and wishes to end the year with 6,000 pounds in inventory.
a.Prepare a production budget showing the number ceramic pots that the company must manufacture to carry out these plans.
b.Prepare a direct materials purchases budget showing the number of pounds of clay that the company must purchase during the year.

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Definitions:

Chapter 7 Petition

A legal document filed in a bankruptcy case that initiates the process for an individual or business to liquidate assets under the protection of Chapter 7 of the U.S. Bankruptcy Code.

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Bankruptcy Code

The body of federal law under the United States Code that governs the process of bankruptcy in the United States.

Statutory Lien

A legal claim or hold on property, established by statute, as security for the payment of a debt or obligation.