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A company has the following data to prepare the budgets for 2023: Budgeted Sales units: 1 st Qtr 5,000; 2 nd Qtr 5,500; 3 rd

A company has the following data to prepare the budgets for 2023:

  • Budgeted Sales units: 1st Qtr 5,000; 2nd Qtr 5,500; 3rd Qtr 6,000
  • Desired Ending Finished Goods Inventory: 20% of next Qtr Sales
  • Desired Ending Raw Material Inventory: 30% of next Qtr Production
  • Beginning Inventory Balances for Production and Material follow the same percentage relationships
  • Each unit requires 2 pounds of material, at $5 per pound

Answer the following questions based on the data above in developing Production and Direct Material budgets:

  1. Compute the Production Units Required for Qtr 1
  2. Compute the Production Units Required for Qtr 2
  3. Compute the total pounds of Direct Material Purchases for Qtr 1
  4. Compute the total cost of Direct Material Purchases for Qtr 1

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