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Spruce Grove Co. manufactures furniture. To produce each unit of finished goods, the firm uses 9 kilograms of direct materials. The firm does not utilize
Spruce Grove Co. manufactures furniture. To produce each unit of finished goods, the firm uses 9 kilograms of direct materials. The firm does not utilize its direct materials for any other purpose. The cost for direct materials is $12.50 per kilogram. 80% of the firm's direct materials purchases are paid for in the quarter of purchase, and the other 20% in the following quarter. All direct materials ordered during a quarter are delivered during that quarter. At the end of each quarter, it is company policy to have on hand the following inventory quantities: 20% of the finished goods forecast to be sold during the next quarter 30% of the direct materials (kilograms) projected to be used during the next quarter The firm's quarterly sales forecast in # of units) is provided below: Quarter Units Sold 1 800 2 200 3 900 4500 Required: Determine the following budget elements: Part a. The volume of finished units to be produced for the first & second quarters respectively
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