Bonita Enterprises is a boutique guitar manufacturer. The company produces both acoustic and electric guitars for rising and established professional musicians. Vanessa Aaron, the companys sales manager, prepared the following sales forecast for 2018. The forecasted sales prices include a 5% increase in the acoustic guitar price and a 10% increase in the electric guitar price, to cover anticipated increases in raw materials prices.

		Sales Price			1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
Acoustic guitar sales		$1,210			200			260			300			310
Electric guitar sales		$2,390			420			380			340			370

PART ONE: On December 31, 2017, Bonita had 30 acoustic guitars in stockfewer than the desired inventory level of 80 guitars, based on the following quarters sales. The company has budgeted for sales of 240 acoustic guitars in the first quarter of 2019. Prepare the 2018 production budget for acoustic guitars.

PART TWO: Each acoustic guitar requires a maple neck blank, which Bonita purchases for $45. On December 31, 2017, Bonita had 420 neck blanks in inventory. Spoilage during the production process results in a standard quantity of 1.5 necks per acoustic guitar. Because of recent delivery problems, Bonita wants to maintain an ending inventory equal to 50% of the following quarters production needs. Since the supplier has assured Bonita that the delivery issues will be resolved by the end of December, Bonita wants only 340 neck blanks in inventory on December 31, 2018. Prepare the purchases budget for neck blanks for 2018.