Budget Preparation

Given the following information, prepare a sales budget, a raw materials inventory purchase budget and a production budget.

Sales forecast

10,000 units of ASD-34 at $159 each

Beginning raw materials inventory

1,000 units of UIO-89 at a cost of $12.00 each

Ending raw materials inventory

2,000 units of UIO-89

Beginning finished goods inventory

3,000 units of ASD-34

Ending finished goods inventory

4,000 units of ASD-34

Each unit of ASD-34 produced requires:

2 units of UIO-89

3 direct labor hours at $23.00 per hour

Manufacturing overhead at 150% of direct labor cost