Production, direct materials, and direct labor budgets Gerrad Manufacturing has projected sales of its product for the next six months as follows:

January	300	units
February	700	units
March	1,000	units
April	900	units
May	400	units
June	300	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 months production needs. Januarys 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	Answer	Answer	Answer
EI	Answer	Answer	Answer
Total units needed	Answer	Answer	Answer
BI	Answer	Answer	Answer
Units produced	Answer	Answer	Answer

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	Answer	Answer	Answer
Cost of raw material purchases	Answer	Answer	Answer

c. Prepare a direct labor budget (assuming a $12 per hour rate) for February, March, and April.

	February	March	April
Units produced	Answer	Answer	Answer
DLHs per unit	Answer	Answer	Answer
Total hours	Answer	Answer	Answer
Cost per DLH	Answer	Answer	Answer
Cost of DL	Answer	Answer	Answer