Solution-Create a production budget and a direct materials

Create a production budget and a direct materials budget

Assignment Help Managerial Accounting

Reference no: EM132658212

A Company has budgeted the following unit sales:

2020 Units

January 10,000

February 8,000

March 9,000

April 11,000

May 15,000

On December 31, 2019 the finished goods units on hand were 2,000 units. Each unit requires 3 pounds of raw materials that are estimated to cost an average of $4 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales.

They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 8,640 pounds of raw materials on hand at December 31, 2019.

Required

Problem a: For the first quarter of 2020, prepare

1) a production budget and

2) a direct materials budget.

Reference no: EM132658212

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Create a production budget and a direct materials budget

Reference no: EM132658212

Reference no: EM132658212

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