Preparation of Individual Budgets During the first calendar quarter of 2016, Williams Corporation is planning to manufacture a new product and introduce it in two regions. Market research indicates that sales will be 10,000 units in the urban region at a unit price of $65 and 8,000 units in the rural region at $55 each. Because the sales manager expects the product to catch on, she has asked for production sufficient to generate a 6,000-unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses:

			Variable		Fixed
			(per unit)		(total)
Manufacturing costs:
Direct materials
A (2 lb. @ $2.50/lb.)			$5.00		-
B (5 lb. @ $1.40/lb.)			7.00		-
Direct labor (2 hours per unit)			10.00		-
Manufacturing overhead
Depreciation			-		$22,500
Factory supplies			0.55		2,500
Supervisory salaries			-		16,250
Other			0.65		9,200
Operating expenses:
Selling:
Advertising			-		12,500
Sales salaries& commissions*			1.25		20,000
Other*			0.50		4,200
Administrative
Office salaries			-		15,000
Supplies			0.40		1,200
Other			0.25		5,000

*Varies per unit sold, not per unit produced.

a. Assuming that the desired ending inventories of materials A and B are 6,000 and 22,000 pounds, respectively, and that work-in-process inventories are immaterial, prepare budgets for the calendar quarter in which the new product will be introduced for each of the following operating factors:

Do not use negative signs with any of your answers below.

1. Total sales

$Answer

2. Production

Answer units

3. Material purchases cost

				Material A	Material B
Total pounds (lbs.) required for production				Answer	Answer
Desired ending materials inventory				Answer	Answer
Total pounds to be available				Answer	Answer
Beginning materials inventory				Answer	Answer
Total material to be purchased (lbs.)				Answer	Answer
Total material purchases ($)				Answer	Answer