Problem #2

The Maverick Company manufactures and sells three products X,Y, and Z. In September, 2003, Maverick's budget department gathered the following forecast date related to its

operations in the coming year.

Projected Sales for Fourth Quarter

Item	Quantity	Unit Price
Product X	4,500	$12
Product Y	2,000	$25
Product Z	3,000	$20

Inventories in Units

Item	Beginning	Desired Ending
Product X	600	900
Product Y	500	400
Product Z	400	500
Material A	2,000	2,500
Material B	1,500	2,000
Material C	2,500	2,000

Materials Production Requirements for Each Unit of Product

Item	Unit of Material A	Unit of Material B	Unit of Material C
Product X	3	1	2
Product Y	2	2	4
Product Z	1	3	2

There is no beginning or ending inventory of work in process. Budgeted unit costs for materials A,B, and C are $.50, $2.00 and $1.50 respectively.

Required :

(1) Prepare a sales budget that includes quantities and revenues for each of the three products.

(2) Prepare a production budget for all three products.

(3) Prepare a materials usage budget in units & amount.

(4) Prepare a materials purchases budget in units & amount.