Reference no: EM133157775
Question - Each unit sells for $38.
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January
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February
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March
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April
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May
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June
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Forecasted Sales (units)
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10,000
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12,000
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14,000
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16,000
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11,000
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13,000
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Each unit requires 6 pounds of Raw Material.
Each unit requires 4.5 hours of Direct Labor.
Each unit requires 2.5 hours of machine time.
Each pound of material costs $8.
Your desired Ending Inventory in units every month for Finished Goods is 15% of next month's sales.
Your desired Ending Inventory in pounds every month for Raw Material is 20% of next month's usage.
Beginning Inventory of Finished Goods on January 1st was 1,500 units.
Beginning Inventory of Raw Material on January 1st was 12,360 pounds.
Required -
Prepare a Production Budget for January, February, March, April.
Using your answer from the Production Budget, prepare a Raw Material Purchases Budget for January, February and March.