Problem 2

The Batting Company manufactures cricket bats which it sells for $80 each. For the first quarter of 2020, the company collectd the following information.

1. Budgeted sales, 4,000 bats
2. Finished good inventory on December 31, 2019, 1,000 bats
3. Desired ending inventory of bats at the end of March 2020, 600.
4. Direct materials requirements are 3 feet of lumber, for each bat at a cost of $5.50 per foot.
5. Direct materials inventory on December 31, 2019 was 3,000 feet of lumber at $5.50 per foot.
6. Desired ending inventory of raw materials is 5,000 feet of lumber.
7. Each bat requires 2 hours of direct labor at an average cost of $20 per hour

Required:

Prepare the following for the Batting Company for the first quarter.

1. The sales budget
2. The production budget
3. The direct materials and the direct labor budgets