Reference no: EM131894609

Question 1 - Landers Company has budgeted the following unit sales:

2012 2013

Quarter Units Quarter Units

1 70,000 1 60,000

2 40,000

3 50,000

4 80,000

The finished goods inventory on hand on December 31, 2010 was 14,000 units. It is the company's policy to maintain a finished goods inventory at the end of each quarter equal to 20% of the next quarter's anticipated sales.

Instructions - Prepare a production budget for 2012.

Question 2 - Avery Company manufactures a product called Deluxe. The budgeted units to be produced are as follows:

2012 Deluxe

July 15,000

August 10,000

September 14,000

October 12,000

It takes 5 pounds of direct materials to produce the Deluxe product. It is the company's policy to maintain an inventory of direct materials on hand at the end of each month equal to 20% of the next month's production needs. Direct materials inventory on hand at

June 30 were 15,000 pounds. The cost per pound of materials is $7 for Deluxe.

Instructions - Prepare a direct materials budget for the Deluxe product for the third quarter of 2012.