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ACME Inc. produces a single product with the following information. Budgeted sales for 2023 are: Units April 60,000 May 80,000 June 65,000 July 55,000 The

ACME Inc. produces a single product with the following information.  Budgeted sales for 2023 are:

 

Units

April

60,000

May

80,000

June

65,000

July

55,000

 

The company has the following inventory requirements:

  • The finished goods ending inventory must be 10% of the following month's sales.
  • Each unit requires 5 grams of raw materials.
  • The raw materials ending inventory must be equal to 15% of the following month's production needs for raw materials.

 

Required (the three-line report heading is not needed for this question):

  1. a production budget for the second quarter beginning April, by month and in total. (9.5 marks)
  2. a direct material purchases budget showing the quantity of materials to be purchased for May.

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