Pargo Company is preparing its master budget for 2017. Relevant data pertaining to its sales, production, and direct materials budgets are as follows.

Sales.Sales for the year are expected to total1,400,000units. Quarterly sales are18%,26%,24%, and32%, respectively. The sales price is expected to be $40per unit for the first three quarters and $46per unit beginning in the fourth quarter. Sales in the first quarter of 2018 are expected to be10% higher than the budgeted sales for the first quarter of 2017.

Production.Management desires to maintain the ending finished goods inventories at20% of the next quarters budgeted sales volume.

Direct materials.Each unit requires2pounds of raw materials at a cost of $12per pound. Management desires to maintain raw materials inventories at10% of the next quarters production requirements. Assume the production requirements for first quarter of 2018 are505,000pounds.

Prepare the sales, production, and direct materials budgets by quarters for 2017.

PARGO COMPANY Sales Budget For the Year Ending December 31, 2017December 31, 2017For the Quarter Ending December 31, 2017
Quarter
1	2	3	4	Year
Expected unit sales
Unit selling price	$	$	$	$
Total sales	$	$	$	$	$

PARGO COMPANY Production Budget For the Year Ending December 31, 2017December 31, 2017For the Quarter Ending December 31, 2017
Quarter
1	2	3	4	Year
Direct Materials Per UnitDesired Ending Finished Goods InventoryBeginning Direct MaterialsDirect Materials PurchasesExpected Unit SalesTotal Required UnitsDesired Ending Direct MaterialsBeginning Finished Goods InventoryRequired Production UnitsTotal Materials Required
LessAdd: Desired Ending Finished Goods InventoryDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required UnitsBeginning Direct MaterialsBeginning Finished Goods InventoryDesired Ending Direct Materials
Desired Ending Finished Goods InventoryDirect Materials Per UnitDirect Materials PurchasesBeginning Direct MaterialsBeginning Finished Goods InventoryDesired Ending Direct MaterialsExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units
AddLess: Total Required UnitsRequired Production UnitsBeginning Finished Goods InventoryBeginning Direct MaterialsDesired Ending Direct MaterialsDirect Materials PurchasesExpected Unit SalesDesired Ending Finished Goods InventoryTotal Materials RequiredDirect Materials Per Unit
Desired Ending Finished Goods InventoryExpected Unit SalesRequired Production UnitsDirect Materials Per UnitTotal Materials RequiredDesired Ending Direct MaterialsDirect Materials PurchasesTotal Required UnitsBeginning Finished Goods InventoryBeginning Direct Materials

PARGO COMPANY Direct Materials Budget For the Quarter Ending December 31, 2017December 31, 2017For the Year Ending December 31, 2017
	Quarter
	1	2	3	4	Year
Direct Labor Cost Per HourCost Per PoundTotal Required Direct Labor HoursBeginning Direct MaterialsTotal Materials RequiredTotal Direct Labor CostDirect Materials Per UnitUnits to be ProducedTotal Pounds Required for ProductionDirect Labor Time Per UnitTotal Cost of Direct Materials PurchasesDesired Ending Direct MaterialsDirect Materials Purchases
Total Required Direct Labor HoursBeginning Direct MaterialsDesired Ending Direct MaterialsUnits to be ProducedDirect Labor Cost Per HourCost Per PoundTotal Direct Labor CostDirect Labor Time Per UnitTotal Pounds Required for ProductionDirect Materials PurchasesTotal Materials RequiredDirect Materials Per UnitTotal Cost of Direct Materials Purchases
Cost Per PoundTotal Cost of Direct Materials PurchasesDirect Materials PurchasesDirect Labor Cost Per HourTotal Required Direct Labor HoursDesired Ending Direct MaterialsTotal Direct Labor CostTotal Materials RequiredTotal Pounds Required for ProductionUnits to be ProducedBeginning Direct MaterialsDirect Labor Time Per UnitDirect Materials Per Unit
AddLess: Beginning Direct MaterialsDirect Materials Per UnitDirect Labor Time Per UnitTotal Required Direct Labor HoursTotal Pounds Required for ProductionUnits to be ProducedTotal Materials RequiredCost Per PoundDirect Materials PurchasesDesired Ending Direct MaterialsTotal Cost of Direct Materials PurchasesTotal Direct Labor CostDirect Labor Cost Per Hour
Total Materials RequiredTotal Cost of Direct Materials PurchasesDirect Labor Time Per UnitTotal Pounds Required for ProductionDirect Materials Per UnitDesired Ending Direct MaterialsCost Per PoundTotal Required Direct Labor HoursDirect Labor Cost Per HourTotal Direct Labor CostBeginning Direct MaterialsDirect Materials PurchasesUnits to be Produced
AddLess: Direct Labor Time Per UnitCost Per PoundTotal Direct Labor CostDesired Ending Direct MaterialsDirect Labor Cost Per HourTotal Cost of Direct Materials PurchasesTotal Materials RequiredTotal Required Direct Labor HoursDirect Materials PurchasesTotal Pounds Required for ProductionDirect Materials Per UnitUnits to be ProducedBeginning Direct Materials
Total Materials RequiredBeginning Direct MaterialsTotal Pounds Required for ProductionDesired Ending Direct MaterialsTotal Required Direct Labor HoursUnits to be ProducedCost Per PoundTotal Cost of Direct Materials PurchasesDirect Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesDirect Materials Per UnitTotal Direct Labor Cost
Cost Per PoundDirect Materials Per UnitTotal Cost of Direct Materials PurchasesTotal Materials RequiredDirect Materials PurchasesDirect Labor Cost Per HourTotal Direct Labor CostUnits to be ProducedTotal Pounds Required for ProductionDirect Labor Time Per UnitBeginning Direct MaterialsTotal Required Direct Labor HoursDesired Ending Direct Materials	$	$	$	$
Total Required Direct Labor HoursTotal Direct Labor CostTotal Pounds Required for ProductionDirect Labor Cost Per HourDirect Labor Time Per UnitDirect Materials PurchasesUnits to be ProducedBeginning Direct MaterialsDirect Materials Per UnitDesired Ending Direct MaterialsCost Per PoundTotal Cost of Direct Materials PurchasesTotal Materials Required	$	$	$	$	$