Chapter 7- Master Budgeting

Excel Problem. Please answer with excel.

1. Micro Products has budgeted sales of its only product for the next 4 months as follows:

July............................. 30,000 units

August........................ 45,000 units

September................. 60,000 units

October...................... 50,000 units

November.................. 57,500 units

The company desires to have inventory on hand at the end of the month equal to 15% of next months budgeted unit sales. This requires was met at the end of June. Each unit of the product requires 4 lbs. of raw material that cost $2/lb. and requires an ending raw materials inventory of 25% of the following months production needs.

Required: Prepare a production budget and a direct materials budget by month and for the quarter. At the bottom of your budget show the dollar amount of the purchases for the month and the quarter.