Preparing production and materials budgets. The Goodman Manufacturing Company makes a single product. Each unit requires the following raw materials:

The sales forecast for the month of January 19X2 is 4,000 units; for February, 3,500 units; and for March, 3,000 units. Enough units should be on hand in the finished goods inventory to meet expected sales for the following month. The raw materials on hand should be equal to the following month’s production requirements.
The work in process inventory remains almost constant.
Instructions 1. Prepare a production budget (Schedule B) for the month of January 19X2.
2. Prepare a materials budget (Schedule D) for January.

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Quantity Unit Cost Total Item Material A 2 Material X 3 Material T 1 $3.40 $6.80 .80 2.40 6.00 6.00 The beginning inventories on January 1, 19X2, are expected to be as follows: Raw Materials Material A, 7,000 at $3.40 each Material X, 10,500 at $.80 each Material T, 3,500 at $6.00 each Finished Goods, 4,000 units Work in Process, 2,000 units (all materials added)