Karam Inc. has compiled the following data in order to put together their first quarter operating budget for 2011:

Each unit requires three hours of direct labor.

Additional information: Karam sells each unit for $95. Company policy is to have 30 percent of next month's sales (in units) in ending finished goods inventory. Company policy is to have 40 percent of next month's production needs in ending raw materials inventory. The production needs for April is 95,500. It takes three pounds of material to produce each unit and the cost is $2.75/pound.

A. Prepare a sales budget for the January, February and March and for the first quarter in total.

B. Prepare a production budget for January, February and March and for the first quarter in total.

C. Prepare a direct materials purchases budget for January, February and March and for the first quarter in total.

Transcribed Image Text:

January Sales (units) 35,000 February 31,000 March 38,000 April 29,000 January Sales (units) 35,000 February 31,000 March 38,000 April 29,000

Answer rating: 100% (QA)

Karam Inc A Sales Budget For the Quarter Ended March 31 20XX January February March Total Sales in u... View the full answer