a. Smurfie Company expects sales volume to be 2500 units in first quarter with 250 units increase in each succeeding quarters. Unit Selling price= $40 b. Smurfie Company wants to maintain their ending inventory equal to 30% of the next quarters budgeted sales volume

c. Smurfie Company wants to maintains an ending inventory of raw materials equal to 10% of the next quarters productions requirements. Three pounds of raw materials are required to make each unit of finished goods, raw materials purchase are expected to cost $3 per pound. Desired ending Direct materials amount is 1000 pounds for the fourth quarters

d. Two hours of direct labor are required to produce each units of finished goods. Anticipated Direct labor cost is $6 e. Prepare Budgeted Income Statement. The companys overhead rate is 50% of Direct Labor Cost and its General and Administrative expense averages at 20% of COGS. (use tax rate = 25%)

Prepare the sales budget, production budget, direct materials, direct labor, manufacturing overhead budget, COGS budget, Selling and administrative expense budget and budget income statement