Preparing production and materials budgets. The Hirito Company manufactures a single product. Each unit requires the following raw materials:

The beginning inventories on January 1, 19X2, are expected to be as given below.

The sales forecast for the month of January 19X2 is 3,000 units; for February, 2,200 units; and for March, 1,600 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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Item Quantity Unit Cost Total Frames 1 $12.00 $12.00 Panels 4 3.40 13.60 Assembly Units 1 2.85 2.85