The production manager of the Morris Company maintains an inventory of materials equal to production needs for the next month because of potential delays in shipments from his Korean supplier. Each unit takes 4 pounds of materials, which cost $3 per pound. Finished goods inventory is usually maintained at 20 percent of the following month's budgeted sales. Budgeted sales in units for the first five months of 1998 are:

As of December 31, 1997, 60,000 pounds of materials and 3,000 units of finished
goods were on hand.

Required:
Prepare a budget for production in units and a budget for purchases in pounds and dollars for the first three months of 1998.

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Month Budgeted Sales Month Budgeted Sales January February March 12,000 April 16,000 16,000 May. 20,000 15,000