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Yount Company has budgeted the following unit sales:
2017 Units
January 10,000
February 8,000
April 11,000
May 15,000
Point 1: The finished goods units on hand on 31 December 2016, was 1,000 units. Each unit requires 2 pounds of raw materials that are estimated to cost an average of RM 4 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 10% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 20% of the pounds needed for the following month's production. There were 3,920 pounds of raw materials on hand at 31 December 2016.
Instruction:
Problem 1: For the first quarter of 2017, prepare (1) a production budget and (2) a direct materials budget
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