Denim Factory is a company that manufactures jackets and is in the process of making budget for the year 2020, with the following details:

1. Budgeted sales for the first months are as follows:

January February March

25,000 jackets 30,000 jackets 20,000 jackets

2. Thesellingpriceforeachjacketis$50.

3. Endinginventoryofjacketsisestimatedtobe20%ofthenextmonthssales.

4. Assume that target ending inventory for March is 3,000 jackets and the beginning

inventory in January is 5,000 jackets.

Required:

a. Prepare the sales budget for January, February, March, and for the first quarter of 2020.

b. Prepare the production budget for January, February, March, and for the first quarter of 2020.

c. Provide examples of how human factors could affect budgeting process in an organization.

d. Explain the meaning of budgetary slack and how companies should manage this.