E7-1 Preparing sales budget and production budget

The sales department of Macro Manufacturing Co. has forecast sales for its single product to be 22,000 units for June, with three- quarters of the sales expected in the East region and one-fourth in the West region. The budgeted selling price is $35 per unit. The desired ending inventory on June 30 is 4,000 units, and the expected beginning inventory on June 1 is 5,000 units. Prepare the following:

a. A sales budget for June.

b. A production budget for June.

E7-2 Production budget and direct materials budget

The sales department of F. Pollard Manufacturing Co. has forecast sales in March to be 24,000 units. Additional information follows:

Finished goods inventory, March 1 3,600 units

Finished goods inventory required, March 31 1,200 units

Materials used in production:

Required

Inventory Inventory Standard

March 1 March 31 Cost

A (one gallon per unit) 600 gal 1,200 gal $2.40 per gal.

B (one pound per unit) 1,200 lb 1,200 lb $1.20 per lb

Prepare the following:

a. A production budget for March (in units).

b. A direct materials budget for the month (in units and dollars).

E7-8 Preparing a flexible budget

Using the following per-unit and total amounts, prepare flexible budget at the 17,000-, 18,000-, and 19,000-unit levels of production and sales for Natural Products Inc.:

Selling price per unit............................................ $75.00

Direct materials per unit ........................................ $24.00

Direct labor per unit............................................. $ 7.50

Variable factory overhead per unit.............................. $ 5.00

Fixed factory overhead.......................................... $75,000

Variable selling and administrative expense per unit. $12.00

Fixed selling and administrative expense ...................... $80,000