Reference no: EM131729410

Lubriderm Corporation makes college mascot statues. Its popular USF Bulls product has the following budgeted sales for the next six-month period:

Month Unit Sales

June 90,000
July 120,000
August 210,000
September 150,000
October 180,000
November 120,000

The selling price of each Bulls statue is $100.00.

There were 30,000 finished Bulls statues in inventory at the beginning of June. Plans are to have an inventory of finished products that equal 20% of the unit sales for the next month. The Company has no beginning or ending work-in-progress in any month.

Five pounds of materials are required for each statue produced. Each pound of material costs $8. Inventory levels for materials are equal to 30% of the needs for the next month. Materials inventory on June 1 was 15,000 pounds.

It takes 2 hours of labor to make one statue. The Company pays a labor rate of $15 per hour.

The Company allocates overhead based on finished goods produced. The allocation rate is $10 per unit.

Lubriderm's current selling and administration costs are as follows:
Selling $10.00 per statue sold
Administration $75,000 per month
Required:

a. Prepare production budgets in units for July, August, and September.

b. Prepare a purchases budget in pounds for July, August, and September, and give total purchases in both pounds and dollars for each month.

c. Prepare a cost of sales budget for July, August and September. Be sure to label each cost component clearly.

d. Prepare a budgeted income statement for July, August and September.