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A sales budget for the first five months of 19A is given for a particular product line manufactured by Kaehler Co. Ltd.:
Sales Budget
in Units
January
10,800
February
15,600
March
12,2!00
April
10,400
May
9,800
The inventory of finished products at the end of each month is to be equal to 25 percent of the sales estimate for the next month. On January I-, there were 2,700 units of product on hand. No work is in process at the end of any month.
Each unit of product requires two types of materials in the following quantities:
-Material A: 4 units
-Material B: 5 units
Materials equal to one-half of the next month's requirements are to be on hand at the end of each month. This requirement was met on January 1, 19A. Prepare a budget showing the quantities of each type of material to be purchased each month for the first quarter of 19A.
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