Prepare a production and materials budget for the tables

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Reference no: EM133000446

Question - Masons Homeware is a furniture manufacturing company in Southern Tasmania. Every year the company prepares a complete set of budgets. The budgeting process begins with information supplied by the Sales and Marketing Department.

The Sales and Marketing Department has predicted unit sales for wooden tables to be as follows:

Month

January

February

March

April

May

Sales

33,000

42,000

45,000

40,000

37,000

The balance in inventory at the beginning of the year was 17 000 tables. The company plans to have inventory at the end of the month equal to 40% of the following month's sales.

Each table requires 2.5 square metres of wood. The amount of wood in inventory at the beginning of the year was 40,000 square metres. The company plans to have an inventory at the end of the month equal to 30% 0f the following month's production. The average cost of wood is $10 per square metre.

Required - Prepare a Production and Materials budget for the tables for the ?rst three months of the year and a total for the quarter ending March.

Reference no: EM133000446

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