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Fuqua Companys sales budget projects unit sales of part 198Z of 11,000 units in January, 12,100 units in February, and 13,900 units in March. Each
Fuqua Companys sales budget projects unit sales of part 198Z of 11,000 units in January, 12,100 units in February, and 13,900 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $4 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, 2019.
Prepare a direct materials budget for January 2020.
Fuqua Company's sales budget projects unit sales of part 1987 of 11,000 units in January, 12,100 units in February, and 13,900 units in March. Each unit of part 1987 requires 4 pounds of materials, which cost $4 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2019. Your answer is correct. Prepare a production budget for January and February 2020. FUQUA COMPANY Production Budget For the Two Months Ending February 28, 2020 January February Expected Unit Sales 11000 12100 Add V: Desired Ending Finished Goods Inventory 2420 2780 Total Required Units 13420 14880 Less : Beginning Finished Goods Inventory 2200 i 2420 i Required Production Units 11220 12460 e Textbook and Media Attempts: 1 of 5 used Prepare a direct materials budget for January 2020. FUQUA COMPANY Direct Materials Budget For the Month Ending January 31, 2020 January Units To Be Produced 11220 Direct Material Pounds Per Unit 4 Direct Materials Purchases 44880 Add : Desired Ending Finished Goods Inventory 4984 Total Cost of Direct Materials Purchases 49864 Less : Beginning Finished Goods Inventory 14432 Units To Be Produced 35432 Cost Per Pound $ Direct Materials Purchases $ 1,41,728Step by Step Solution
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