Garver Industries has budgeted the following unit sales for 2013: January 10,000, February 7,000, March 8,500, April 11,000, May 14,000

The finished goods units on hand on December 31, 2012, was 2,000 units. Each unit requires 2 pounds of raw materials that are estimated to cost an average of $4 per pound. It is the companys policy to maintain a finished goods inventory at the end of each month to equal to 20% of next months anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following months production. There were 5,640 pounds of raw materials on hand at December 31, 2012.

For the first quarter of 2013, prepare (1) a production budget and (2) a direct materials budget. Be sure to include the budget amounts for each month as well as the totals for the quarter: