Exercise 21-8 Fuqua Companys sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next months production requirements, and its ending finished goods inventory to equal 20% of the next months expected unit sales. These goals were met at December 31, 2016.

Prepare a production budget for January and February 2017.

FUQUA COMPANY Production Budget
		January		February
Add/Less
Add/Less

Prepare a direct materials budget for January 2017.

FUQUA COMPANY Direct Materials Budget
		January
Add/Less
Add/Less
		$
		$

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