Eilert Company produces wooden benches and has budgeted the following unit sales:

			2021						2022
	Quarter				Units		Quarter			Units
		1		20,000				1		35,000
		2		35,000
		3		60,000
		4		75,000

The finished goods inventory on hand on December 31, 2020 was 4,000 units. It is the company's policy to maintain a finished goods inventory at the end of each quarter equal to 30% of the next quarter's anticipated sales.

Instructions

1. Prepare a production budget (by quarters) for 2021.
2. Assuming that it takes 20 feet of wood to make each bench, and that management wants inventory to equal 20% of the next quarters raw material needs, budget raw material purchases for the first three quarters of 2021. (Calculate beginning inventory for the first quarter using the same management inventory goals)
3. We also sell two cushions with each bench sold. They are priced reasonably and 80% of customers buy them!! Management wants 10% of the upcoming quarters sales needs to be on hand as inventory. Budget the cushion purchases for the first three quarters of 2021. (Calculate beginning inventory for the first quarter using the same management inventory goals)

Parts 2 and three only