Inventory policies -

Desired units of ending finished goods inventory is 10% of the following month's sales in units.

Desired units of ending raw materials inventory is 20% of the following month's units of raw materials needed to meet production.

December January February March April 20,000 29,000 30,000 37,000 Budget unit sales: 32,000 Sales Price $7 Units of raw materials needed per unit of finished goods Unit cost of raw materials Beginnning finished goods inventory Calculate this based on the inventory policy Raw materials required to produce one unit Beginning raw materials inventory Calculate this based on the inventory policy CONSTRUCT THE SALES BUDGET: Total Quarter January February March Total Quarter CONSTRUCT THE PRODUCTION BUDGET: January February March CONSTRUCT THE RAW MATERIALS PURCHASE BUDGET: Total Quarter January February March