Reference no: EM131894815

Preparing Operating Budgets

Snip and Chip Inc. sells silk upholstery curtains for $150 each. The project's budgeted unit sales for four months during the current year appear below:

February	$39,000
April	$42,000
May	$44,000
June	$40,000

Additional information:
- The project desires to have an inventory at the end of each month equal to 15 percent of the following month's budgeted unit sales.
- Each curtain requires 2.0 yards of fabric.
- At the end of each month, the project decides to have 20 percent of the production material required for the next month on hand.
- The fabric costs $25 per yard. Each curtain produced requires 1 hour of direct labor.
- The project pays $27 per hour to its employees.

Prepare the following budgets for the project:
- Production budget for the month of April
- Materials purchase budget for April

Submission Requirements:
- Answer each problem in detail with conclusions and results.
- Submit the calculations in a Microsoft Excel file, showing step-by-step calculations.
- Submit the responses in a Microsoft Word document meeting the following criteria: o Font: Arial, Size: 12 point