Thank you! Please show all steps. Sugar has forecast sales for the next three mo

Question

Thank you! Please show all steps.

Sugar has forecast sales for the next three months as follows: July 4,000 units, August 6,000 units, September 7,500 units, and October 8,000 units. Sugar's policy is to have an ending inventory of 40% of the next month's sales needs on hand. July 1 inventory is projected to be 1,500 units. Manufacturing overhead is budgeted to be $17,000 plus $5 per unit produced. Prepare a production budget for Sugar for as many months as is possible. Prepare a manufacturing overhead budget for the three months July - September. Be sure to include a total for the quarter as well.

Explanation / Answer

Production Budget:

Manufacturing Overhead Budget:

July August September Sales in units 4,000 6,000 7,500 Add: Desired Closing Inventory 2,400 3,000 3,200 Total Requirement 6,400 9,000 10,700 Less: Opening Inventory 1,500 2,400 3,000 Production required 4,900 6,600 7,700

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