Problem 1- Purchases budget preparation

Kaloy Enterprises, a merchandising firm engaged in selling empty drums, is preparing its monthly budget for the next quarter.Budgeted sales of empty drums are as follows:

March200 units

April250 units

May300 units

June 400 units

July350

Because of the difficulty of finding suppliers of empty drums, as well as the problem of transporting teh same from supplier's place to Kaloy's store, it set a policy of keeping in stock an inventory equal to 40% of the next month's budgeted sales.

Required:Prepare the purchases budget for Kaloy Enterprises for the quarter ended June 30 with details shown for each month.

Problem 2 - Production Budget

Producers' Inc. Wants to know the number of units that it has to produce for each quarter of the following year.At the end of the current year, it is expected that the company will have in stock 4,800 units of its finished products.The inventory will be maintained at this level up to the second quarter of the year.In the third and fourth quarters, however, the inventory level will be increased by one half.Projected quarterly sales for the coming year are:

First Quarter-42,000 units

Second Quarter -51,000 units

Third Quarter-64,000 units

Fourth Quarter-68,000 units

Required:Prepare the production budget for the coming year, showing the details for each quarter.