You have been working on the budget for 1999 for WWWW Company, located in Windsor, Canada. The president, Will Nelson, is holding a key meeting in a Seoul, Republic of Korea, parts supplier plant at 9:00 a.m. on Thursday. Mr. Nelson wants the sales and production budgets in units and the quantities of materials purchases for the Windsor plant for next year faxed to him. It's now 2:00 p.m. on Wednesday in Windsor, twelve hours behind Seoul. You have certain data on your desk but nothing about units to be sold. Avail- able information reveals that 4 pounds of materials are required for each unit of product manufactured. Materials are used in the quarter acquired except for changes in materials inventory. An inventory of 20 percent of next month's usage should be planned for materials at all times. You remember seeing the December 31, 1999, forecast balance sheet which showed 400,000 pounds in materials inventory. Planned usage for the year is:

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Pounds of Materials First quarter Second quarter Third quarter. Fourth quarter. 1,200,000 1,500,000 2,000,000 2,500,000 Each pound of materials purchased costs C$2.40. The inventory of finished goods is 12,000 units at the beginning of the year. Plans call for this inventory to increase by 2,000 units each quarter until year end, when it will be 20,000 units. Required: 1. Prepare schedules to support the forecast of production and sales units by quarters. 2. Prepare a budget of sales in Canadian dollars assuming a selling price per unit of product of C$60. 3. You have finished the sales schedule by 4:00 p.m. Now convert the materials used in a purchases budget in pounds and dollars and determine the costs of materials in cost of goods sold and in inventory by quarter.