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 total 1,800,000 units. Quarterly sales are 18%, 25%, 25%, and 32%, respectively. The sales price is expected to be $39 per unit for the first three quarters and $43 per unit beginning in the fourth quarter. Sales in the first quarter of 2018 are expected to be 15% higher than the budgeted sales for the first quarter of 2017. Production. Management desires to maintain the ending finished goods inventories at 25% of the next quarters budgeted sales volume. Direct materials. Each unit requires 2 pounds of raw materials at a cost of $10 per pound. Management desires to maintain raw materials inventories at 10% of the next quarters production requirements. Assume the production requirements for first quarter of 2018 are 509,000 pounds. Prepare the sales, production, and direct materials budgets by quarters for 2017.

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 total 1,800,000 units. Quarterly sales are 18%, 25%, 25%, and 32%, respectively. The sales price is expected to be $39 per unit for the first three quarters and $43 per unit beginning the fourth quarter. Sales in the first quarter of 2018 are expected to be 15% higher than the budgeted sales for the first quarter of 2017. Production. Management desires to maintain the ending finished goods inventories at 25% of the next quarter's budgeted sales volume. Direct materials. Each unit requires 2 pounds of raw materials at a cost of $10 per pound. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for first quarter of 2018 are 509,000 pounds. Prepare the sales, production, and direct materials budgets by quarters for 2017. PARGO COMPANY Sales Budget For the Year Ending December 31, 2017 Quarter 2 3 Year Expected unit sales 324000 450000 450000 576000 1,800,000 39 $ 39 39 $ 43 Unit selling price Total sales 12,636,000 17,550,000 17,550,000 24,768,000 72,504,000 PARGO COMPANY Production Budget For the Year Ending December 31, 2017 Quarter 3 4. Year 324000 450000 450000 576000 Add Required Production Units 112500 112500 144000 93150 Total Required Units 436501 562502 594003 669154 Less Beginning Finished Goods Inventory -81000 -112500 - 112500 144000 Total Required Units 355501 450002 481503 525154 1812160 PARGO COMPANY Production Budget For the Year Ending December 31, 2017 Quarter 2 _ 450000 3 Year 324000 450000 576000 Add Required Production Units 112500 112500 144000 93150 Total Required Units 436501 562502 594003 669154 Less : Beginning Finished Goods Inventory -81000 -112500 - 112500 144000 Total Required Units 355501 450002 481503 525154 1812160 PARGO COMPANY Direct Materials Budget For the Year Ending December 31, 2017 Quarter Year Units to be Produced 355501 450002 481503 525154 Direct Materials Per Unit Total Materials Required 711002 900004 900004 963006 1050308 Add : Desired Ending Direct Materials rials 90000 96301 105031 50900 Total Direct Labor Cost 801002 996305 1068037 1101208 Less : Beginning Direct Materials - 71100 i -90000 i -96301 -105031 Direct Materials Purchases 729902 906304 971736 996177 Cost Per Pound 10 10 $ 10 $ 10 Total Cost of Direct Materials Purchases $ 7,299,022 9,063,042 9,717,362 9,961,772 36,041,198