Data Budgeted unit sales - Selling price per unit - Desired ending finished goods inventory is - Finished goods inventory, beginning - Raw materials required to produce one unit - Desired ending inventory of raw materials is - Raw materials inventory, beginning - Raw material costs Construct the sales budget Budgeted unit sales Selling price per unit Total sales Construct the production budget IBudgeted unit sales Add desired ending finished goods inventory Total needs Less beginning finished goods inventory Required production in units Construct the raw materials purchases budget Required production (units) Raw materials required to produce one unit (pounds) Production needs (pounds) Add desired ending inventory of raw materials (pounds) Total needs (pounds) Less beginning inventory of raw materials (pounds) Raw materials to be purchased (pounds) Cost of raw materials per pound Cost of raw materials to be purchased 1 40,000 $8 30% 12,000 5 10% 23,000 $0.80 1 40,000 $8 $320,000 1' 40,000 18,000 58,000 12,000 46,000 m} "J m) w) "J m) J m) w) Year 2 Quarter Year 3 Quarter 7 2 F 3 I" 4 F 1 r 2 60,000 100,000 50,000 70,000 80,000 of the budgeted unit sales of the next quarter units pounds of the next quarter's production needs pounds per pound Year2 Quarter Year3 Quarter V 2 V 3 V 4 V 1 V 2 60,000 100,000 50,000 70,000 80,000 $8 $8 $8 $8 $8 $480,000 $800,000 $400,000 $560,000 $640,000 Year2 Quarter V 2 V 3 V 4 Year V 1 60,000 100,000 50,000 250,000 70,000 30,000 15,000 21,000 21,000 24,000 90,000 115,000 71,000 271,000 94,000 18,000 30,000 15,000 12,000 21,000 72,000 85,000 56,000 259,000 73,000 Year2 Quarter Year3 Quarter V 2 V 3 V 4 Year V 1 ? ? ? ? ? ? '2 ? ? ? ? ? ? '2 ? ? 2 ? ? ? '2 ? ? ? ? ? ? ? '2 ? ? ? '1' ? ? '2 '7 '2 ? 7 Year 3 Quarter 2 80,000