Michael Company, a manufacturer, predicts sales of 6,300 units in January, 5,850 units in February 8,100 units in March, and 8,900 units in April. The company wants each month's ending finished goods inventory to equal 40% of next month's predicted unit sales Beginning finished goods inventory for January is 2,520 units. Each unit of finished goods requires 0.40 pounds of direct materials at a cost of $10.00 per pound, and 5.0 hours of direct labor at a cost of $20 per hour B Additionally, the company wants each month's ending raw materials inventory to equal 30% of next month's budgeted production Prepare a sales budget, a production budget , a direct materials and a direct labor budget. a 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Michael Company Budget Assumptions For the months of January February, and March 2022 January February Selling price per unit $380 $380 Budgeted sales (units) 6,300 5,850 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 $380 8,100 8,900 9,300 40% 30% 2,520 734 0.40 $10.00 5.0 $20.00 Instructions Budgets undy Atte Type here to search OHHH F B C D E Michael Company Sales Budget For the months of January, February, and March 2022 January February Budgeted sales (units) 6,300 15,850 Selling price per unit $380 $380 Total budgeted sales (dollars) $2,394,000 $2 223.000 March 8,100 $380 $3,078,000 Michael Company Production Budget For the months of January February, and March 2022 January February Next month's budgeted sales (units) 5,850 8,100 Ratio of inventory to future month's sales 40% 40% Budgeted ending inventory (units) 2,340 3. 240 Add: Budgeted sales (units) 6.300 5,850 Required units of available production 8.640 9,090 Deduct Beginning inventory (units) 2.520 2.340 Budgeted units to produce 6.120 GAZ50 March 8.900 40% 3,560 8.100 11660 3.240 8.420 Michael Company Direct Materials Budget For the months of January February and March 2022 January February Budgeted units to produce 6.120 8.750 Materials requirements per unit 0.40 040 Materials needed for production (pounds) 2.448 2.700 Add Distretnd andine inde instructions Budgets Atcerityisestigate March 8.420 0.40 3.368 O U Type here to search D E B Michael Company Direct Materials Budget For the months of January February, and March 2022 January February Budgeted units to produce 6,120 6.750 Materials requirements per unit 10.40 0.40 Materials needed for production (pounds) 2,448 2.700 Add: Budgeted ending inventory (pounds) 810 1,010 Total materials requirements (pounds) 3258 3.710 Deduct Beginning inventory (pounds) Materials to be purchased (pounds) March 8,420 0.40 3,368 Material price per pound Total budgeted cost of direct materials purchases Michael Company Direct Labor Budget For the months of January February and March 2022 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
