Fuque Company\'s sales budget projects unit sales of part 198Z af 10,300 units i

Question

Fuque Company's sales budget projects unit sales of part 198Z af 10,300 units in January, 12,500 units in February, and 13,400 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $5 per pound. Fuqua Company desires its ending raw matenals inventory to equal 40% of he 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 UQUA COMPANY Production Budget January February Preparc a direct materials budget for January 2017 FUQUA COMPANY Direct Materials Budget January

Explanation / Answer

Production budget :

Direct material budget :

January February Sales units 10300 12500 Add: Desired ending inventory 2500 2680 Total 12800 15180 Less: Beginning inventory -2060 -2500 Production unit 10740 12680

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