Caucci Corp. is a construction equipment manufacturer. Company policy dictates that quarterly budgets should be prepared at the start of every year. The chartered accountant, Bianca, is tasked with preparing the budgets for $2015.$ Forecasted quarterly sales are $$600,000($Q$1),$ $$750,000($Q$2),$ $$450,000($Q$3)$ and $$300,000($Q$4).$ The expected unit selling price is $30$$ per unit. The first quarter sales for $2016$ are expected to be $20,000$ units.

Bianca then contacted the inventory manager and discovered that management desires ending finished goods inventory to be $10\%$ of next quarters budgeted sales volume.

Lastly, Bianca found that the company uses $4$kg of materials per unit produced and the materials cost per kilogram is $$2.$ The company wants its ending materials inventory to be $15\%$ of the next quarter$$s production requirement. The production requirement for the first quarter of $2016$ is $20,200$ units.

Required $1$: Prepare a sales and production budget

Required $2$: Prepare a direct materials budget

Answer rating: 100% (QA)

Solution Required 1 Sales and Production Budget To prepare the sales and production budget we need t... View the full answer