Production, direct materials, and direct labor budgets Gerrad Manufacturing has projected sales of its product for the next six months as follows: January 480 units February 1120 units March 1,500 units April 1440 units May 640 units June 480 units The finished product requires 3 pounds of raw material and 10 hours of direct labor. Gerrad tries to maintain a Finished Goods ending inventory equal to the next two months of sales and a Raw Material ending inventory equal to one-half of the current month's production needs. January's beginning inventories are expected to conform to company policy. a. Prepare a production budget for February, March, and April. Note: Use a negative sign in your schedule to indicate that an amount is subtracted. February March April Sales ET 1,120- 1,600 -> 1,440 3.040 2,080 -> 1,120- Total units needed Ell 4,160 3,680 2,560 (2.720) (3,040) (2,080) Units produced 1,440 640-> 480- b. Prepare a forecast of the units and cost of raw material that will be required for February, March, and April. The expected cost per pound of raw material is expected to be $2 in February, $2.30 in March, and $2.40 in April. February March April Required raw material units Cost of raw material purchases S 5,680 x 11,360 x $ 720- 1,656 $ 1,200 2,880 9:46