Clingy Company budgeted the following unit sales:

January 14,000

February 12,000

March 11,000

April 16,000

May 13,000

Each unit requires 2 metres of fabric that is estimated to cost $3.50 per metre. It is company policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. Clingy Company also need to maintain a raw materials inventory at the end of March month equal to 1540 of the metres. There were 1,200 metres of fabric on hand at March 1.

Instructions

Prepare a production budget and a direct materials budget for March.

Answer rating: 100% (QA)

Lets start by preparing the production budget for March and then move on to the direct materials bud... View the full answer