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Sales Price                                                       1st            2nd            3rd              4th         5th

Acoustic guitar sales                                   $1,290      400          570             320         690  

Electric guitar sales                                     $2,570      230          110              200         120  

 

Each acoustic guitar requires a maple neck blank, which Strum purchases for $60. On December 31, 2014, Strum had 400 neck blanks in inventory. Spoilage during the production process results in a standard quantity of 1.2 necks per acoustic guitar. Because of recent delivery problems, Strum wants to maintain an ending inventory equal to 50 percent of the following quarter’s production needs. Since the supplier has assured Strum that the delivery issues will be resolved by the end of December, Strum wants only 300 neck blanks in inventory on December 31, 2015. Prepare the purchases budget for neck blanks for 2015. (Enter "per guitar" value to 1 decimal place, e.g. 3.1. Round all other answers to 0 decimal places, e.g. 153.)        

                                                                                                                          Purchases Budget        

                                                                                    1st Quarter 2nd Quarter  3rd Quarter  4th Quarter  Annual  

Budgeted production    

Standard necks per guitar  

Production needs  

Budgeted ending inventory    

Total DM required (necks)    

Beginning inventory    

Budgeted purchases (necks)    

Standard price per neck    

Budgeted purchases cost    

 

 

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