Exercise 9-8 Fuqua Company\'s sales budget projects unit sales of part 198Z of 1

Question

Exercise 9-8 Fuqua Company's sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 2 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, 2016. Prepare a production budget for January and February 2017 FUQUA COMPANY Production Budget January February LINK TO TEXT VIDEO: APPLIED SKILLS Prepare a direct materials budget for January 2017. FUQUA COMPANY Direct Materials Budget January

Explanation / Answer

Production budget :

Direct material budget :

January February Sales unit 10000 12000 Add: Desired ending inventory 2400 2600 Total needs 12400 14600 Less: Beginning inventory -2000 -2400 Production units 10400 12200

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