Jessica Company, a manufacturer, predicts sales of 9,750 units in January, 9,000 units in February, 12,750 units in March, and 14,000 units in April. The company wants each month's ending finished goods inventory to equal 30% of next month's predicted unit sales. Beginning finished goods inventory for January is 2,925 units. Each unit of finished goods requires 0.35 pounds of direct materials at a cost of $11.00 per pound, and 4.5 hours of direct labor at a cost of $18 per hour. a Additionally, the company wants each month's ending raw materials inventory to equal 50% of next month's budgeted production. Prepare a sales budget, a production budget, a direct materials and a direct labor budget. Jessica Company Budget Assumptions For the months of January, February, and March 2021 January February Selling price per unit $280 $280 Budgeted sales (units) 9,750 9,000 Budgeted sales (units) April Budgeted production (units) April Ratio of ending finished goods inventory to next month's sales Ratio of ending raw materials inventory to next month's requirements Number of units in finished goods inventory, January 1 Number of pounds in raw materials inventory, January 1 Number of pounds of raw materials required per unit Cost per pound of raw materials Number of direct labor hours required per unit Rate per direct labor hour March $280 12,750 14,000 14,700 30% 50% 2,925 1,667 0.35 $11.00 4.5 $18.00 Jessica Company Sales Budget For the months of January, February, and March 2021 January February Budgeted sales (units) Selling price per unit Total budgeted sales (dollars) March March Jessica Company Production Budget For the months of January, February, and March 2021 January February Next month's budgeted sales (units) Ratio of inventory to future month's sales Budgeted ending inventory (units) Add: Budgeted sales (units) 25 26 27 28 29 30 31 32 33 34 35 36 37 Jessica Company Sales Budget For the months of January, February, and March 2021 January February Budgeted sales (units) Selling price per unit Total budgeted sales (dollars) March March 38 Jessica Company Production Budget For the months of January, February, and March 2021 January February Next month's budgeted sales (units) Ratio of inventory to future month's sales Budgeted ending inventory (units) Add: Budgeted sales (units) Required units of available production Deduct: Beginning inventory (units) Budgeted units to produce 39 40 41 42 43 44 45 March Jessica Company Direct Materials Budget For the months of January, February, and March 2021 January February Budgeted units to produce Materials requirements per unit Materials needed for production (pounds) Add: Budgeted ending inventory (pounds) Total materials requirements (pounds) Deduct: Beginning inventory (pounds) Materials to be purchased (pounds) 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 Material price per pound Total budgeted cost of direct materials purchases Jessica Company Direct Labor Budget For the months of January, February, and March 2021 January February Budgeted units to produce Direct labor requirements (hours) per unit Total direct labor hours needed March Direct labor rate (per hour) Total budgeted direct labor cost Instructions Budgets + Ready