4) The Smart Company has been in business for 10 years. The Company has budgeted the following unit sales for 2021:

January 14,000

February 12,000

March 11,000

April 16,000

May 13,000

Each unit requires 1 metres of fabric that is estimated to cost $3.00 per metre. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 10% of next month's anticipated sales. The Company also have a policy of maintaining a raw materials inventory at the end of each month equal to 20% of the metres needed for the following month's production.

Instructions

Prepare a production and direct materials budget for February.