Oriole Companys sales budget projects unit sales of part 198Z of 11,000 units in January, 12,100 units in February, and 13,900 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $4 per pound. Oriole Company desires its ending raw materials inventory to equal 40% of the next months production requirements, and its ending finished goods inventory to equal 20% of the next months expected unit sales. These goals were met at December 31, 2019.

(a)

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Your answer is correct.

Prepare a production budget for January and February 2020.

ORIOLE COMPANY Production Budget For the Two Months Ending February 28, 2020For the Month Ending January 31, 2020For the Quarter Ending February 28, 2020
		January		February
Direct Material Pounds Per UnitDesired Ending Finished Goods InventoryDirect Materials PurchasesTotal Cost of Direct Materials PurchasesDesired Pounds in Ending Materials InventoryBeginning Finished Goods InventoryBeginning Direct MaterialsUnits To Be ProducedTotal Required UnitsExpected Unit SalesCost Per PoundTotal Pounds Needed for ProductionRequired Production UnitsTotal Materials Required
AddLess: Expected Unit SalesBeginning Direct MaterialsCost Per PoundTotal Materials RequiredTotal Required UnitsDesired Ending Finished Goods InventoryRequired Production UnitsUnits To Be ProducedTotal Cost of Direct Materials PurchasesDirect Materials PurchasesBeginning Finished Goods InventoryTotal Pounds Needed for ProductionDesired Pounds in Ending Materials InventoryDirect Material Pounds Per Unit
Beginning Direct MaterialsExpected Unit SalesUnits To Be ProducedTotal Required UnitsTotal Pounds Needed for ProductionCost Per PoundTotal Cost of Direct Materials PurchasesTotal Materials RequiredBeginning Finished Goods InventoryDirect Materials PurchasesDesired Pounds in Ending Materials InventoryRequired Production UnitsDirect Material Pounds Per UnitDesired Ending Finished Goods Inventory
AddLess: Desired Ending Finished Goods InventoryTotal Cost of Direct Materials PurchasesTotal Pounds Needed for ProductionDirect Material Pounds Per UnitRequired Production UnitsUnits To Be ProducedCost Per PoundTotal Materials RequiredBeginning Direct MaterialsDesired Pounds in Ending Materials InventoryBeginning Finished Goods InventoryDirect Materials PurchasesExpected Unit SalesTotal Required Units
Direct Materials PurchasesExpected Unit SalesCost Per PoundTotal Cost of Direct Materials PurchasesTotal Materials RequiredDesired Pounds in Ending Materials InventoryRequired Production UnitsDesired Ending Finished Goods InventoryDirect Material Pounds Per UnitBeginning Direct MaterialsBeginning Finished Goods InventoryUnits To Be ProducedTotal Pounds Needed for ProductionTotal Required Units

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(b)

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Your answer is partially correct.

Prepare a direct materials budget for January 2020.

ORIOLE COMPANY Direct Materials Budget For the Two Months Ending February 28, 2020For the Month Ending January 31, 2020For the Quarter Ending February 28, 2020
		January
Total Cost of Direct Materials PurchasesBeginning Direct Materials (Pounds)Total Required UnitsDirect Materials PurchasesCost Per PoundDirect Material Pounds Per UnitTotal Materials RequiredExpected Unit SalesTotal Pounds Needed for ProductionUnits To Be ProducedDesired Pounds in Ending Materials InventoryBeginning Finished Goods InventoryDesired Ending Finished Goods InventoryRequired Production Units
Total Required UnitsExpected Unit SalesTotal Materials RequiredUnits To Be ProducedCost Per PoundBeginning Direct Materials (Pounds)Total Pounds Needed for ProductionTotal Cost of Direct Materials PurchasesRequired Production UnitsDirect Material Pounds Per UnitBeginning Finished Goods InventoryDesired Pounds in Ending Materials InventoryDirect Materials PurchasesDesired Ending Finished Goods Inventory
Desired Ending Finished Goods InventoryDirect Materials PurchasesExpected Unit SalesBeginning Direct Materials (Pounds)Cost Per PoundTotal Materials RequiredTotal Cost of Direct Materials PurchasesTotal Required UnitsTotal Pounds Needed for ProductionBeginning Finished Goods InventoryRequired Production UnitsDesired Pounds in Ending Materials InventoryUnits To Be ProducedDirect Material Pounds Per Unit
AddLess: Total Materials RequiredTotal Required UnitsDirect Material Pounds Per UnitTotal Pounds Needed for ProductionDesired Ending Finished Goods InventoryBeginning Finished Goods InventoryRequired Production UnitsUnits To Be ProducedExpected Unit SalesTotal Cost of Direct Materials PurchasesBeginning Direct Materials (Pounds)Desired Pounds in Ending Materials InventoryDirect Materials PurchasesCost Per Pound
Expected Unit SalesTotal Cost of Direct Materials PurchasesDirect Material Pounds Per UnitUnits To Be ProducedBeginning Direct Materials (Pounds)Total Pounds Needed for ProductionDirect Materials PurchasesDesired Ending Finished Goods InventoryRequired Production UnitsTotal Required UnitsTotal Materials RequiredCost Per PoundBeginning Finished Goods InventoryDesired Pounds in Ending Materials Inventory
AddLess: Total Cost of Direct Materials PurchasesCost Per PoundUnits To Be ProducedTotal Materials RequiredBeginning Direct Materials (Pounds)Total Pounds Needed for ProductionRequired Production UnitsDesired Ending Finished Goods InventoryBeginning Finished Goods InventoryDirect Materials PurchasesDirect Material Pounds Per UnitDesired Pounds in Ending Materials InventoryTotal Required UnitsExpected Unit Sales
Total Pounds Needed for ProductionDirect Materials PurchasesTotal Materials RequiredDirect Material Pounds Per UnitUnits To Be ProducedDesired Ending Finished Goods InventoryBeginning Finished Goods InventoryTotal Required UnitsCost Per PoundBeginning Direct Materials (Pounds)Desired Pounds in Ending Materials InventoryExpected Unit SalesTotal Cost of Direct Materials PurchasesRequired Production Units
Desired Ending Finished Goods InventoryTotal Materials RequiredDirect Materials PurchasesBeginning Direct Materials (Pounds)Total Pounds Needed for ProductionTotal Cost of Direct Materials PurchasesCost Per PoundRequired Production UnitsUnits To Be ProducedDirect Material Pounds Per UnitDesired Pounds in Ending Materials InventoryExpected Unit SalesTotal Required UnitsBeginning Finished Goods Inventory		$
Direct Material Pounds Per UnitCost Per PoundTotal Required UnitsDirect Materials PurchasesUnits To Be ProducedTotal Cost of Direct Materials PurchasesDesired Ending Finished Goods InventoryBeginning Finished Goods InventoryTotal Pounds Needed for ProductionBeginning Direct Materials (Pounds)Total Materials RequiredDesired Pounds in Ending Materials InventoryExpected Unit SalesRequired Production Units		$