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Tyson Chandler Company's sales budget projects unit sales of part 198Z of 9,700 units in January, 11,500 units in February, and 12,700 units in March. Each unit of part 198Z requires 2 kg of materials, which cost $3 per kilogram. Tyson Chandler Company wants its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 25% of the next month's expected unit sales. These goals were met at December 31, 2019.
Problem 1: Prepare a production budget for January and February 2020.
Problem 2: Prepare a direct materials budget for January 2020.
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