NFT wants an ending inventory equal to 15% of the following month's budgeted sales in units.

On June 30th, 21,000 units were on hand.

The September 30th desired ending inventory is 20,000. units

Production Budget

July August September Quarter

Budgeted Sales 32,000.00 42,000.00 32,000.00 106,000.00

Desired Ending

Inventory 6,300.00 4,800.00 20,000.00 31,100.00

Total Needs

38,300.00 46,800.00 52,000.00 137,100.00

Less Beginning Inventory 21,000.00 6,300.00 4,800.00 32,100.00

Required Production 17,300.00 40,500.00 47,200.00 105,000.00

Part 4: Materials Purchased (5 marks)

NFT uses 10 pounds of material per unit.

NFT has decided it wants 15% material of the following month's production.

On June 30th it had 30,000 pounds of material on had.

The material costs $2.00 per pound.

NFT September 30th desired ending material is 8,000 pounds

Direct Materials Budget

July August September Quarter

Production Units

Materials per unit (pounds)

Production Needs

Add: Desired Ending Inventory

Total Needed

Less: Beginning Inventory

Materials to be Purchased