Budgeting

The company is preparing budget for the next year.

The estimated sales are as follows:

Month 1 6000 units

Month2 7000 units

Month 4 5500 units

Month 5 6000 units

40% of each months sales should be produced in the month of the sale and the rest should be produced in the previous month.

50% of the direct materials required for each months production will be purchased in the previous month and the balance in the month of production. The cost of material per unit is $5.

Calculate:

1. The production budget in units for Month 1

2. Material cost budget for Month 2