Exercise 23-10 oo units in Marhyspected unit 4 pounds o t December requires wver

Question

Exercise 23-10 oo units in Marhyspected unit 4 pounds o t December requires wvere met at Fuqua Company's sales budget projects unit sales of part 198Z of 11,300 units in January, 15,100 units in February, and 17,100 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $3 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2013 dsanu ed Prepare a production budget for January and February 2014 a production ary 2014. ary 2014 FUQUA COMPANY Production Budget For the Two Months Ending February 28, 2014 Janua Februa

Explanation / Answer

Production Budget Particulars January February March Unit Sales            11,300.00            15,100.00            17,100.00 Ending Finished Goods Inventory @20% of next month sales              3,020.00              3,420.00 Beginning Finished Goods Inventory= Ending of prev month              2,260.00              3,020.00 Production in Units= Sales+Ending- Beginning            12,060.00            15,500.00 Direct Materials Budget Particulars January February Production in Units= Sales+Ending- Beginning            12,060.00            15,500.00 Pounds required for production @4            48,240.00            62,000.00 Ending raw Materials = 40%of next month prod'n reqmt            24,800.00 Beginning Raw Mat= Ending of prev month            19,296.00 Purchase of raw materials = Production+Ending- Beginning            53,744.00 Cost per pound                      3.00 Costof purchasing = 53,744 * 3         161,232.00

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