Eunice Ltd. has the following budgeted sales for the next six-month period:

Month Unit Sales

January 80,000

February 90,000

March 120,000

April 150,000

May 180,000

June 120,000

Eunice Ltd. sells a single product at a price of $60 per unit. There were 18,000 units of finished goods in inventory at the beginning of February. Eunice Ltd.s policy is to keep the inventory of finished goods equal to 20% of the unit sales for the next month.

Three kilograms of materials are required for each unit of finished goods produced. Each kilogram of material costs $5. Inventory levels for materials are equal to 20% of the production needs for the next month. Material inventory at the beginning of February was $288,000 at the price of $5 per kilogram.

Required (show your working):

(a) Prepare sales budgets in units and dollars for February to April (3 marks)

(b) Prepare production budgets in units for February to April (3 marks)

(c) Prepare direct materials usage budget in kilograms and dollars for February and March (2 marks)

(d) Prepare direct materials purchases budgets (in kilograms and dollars) for February and March (7 marks)