Annette Company produces a caliber used in the production of automobile transmissions. The caliber is sold to automobile manufactures and automobile engine manufacturers. The Sales Price is $240 per unit. The Budgeted (Expected) Sales In Units for the first four (4) months of the next year are as follow:

MONTH                      UNITS

JANUARY....................30,000

FEBRUARY.................40,000

MARCH......................50,000

APRIL.........................60,000

Annette Company's policy is to have twenty percent (20%) of next month's Budgeted (Expected) Sales in Ending Finished Goods Inventory. In addition, each caliber requires four (4) pounds of metal materials (Direct Materials) which cost $12.50 per pound. Annette Company's policy is to have forty percent (40%) of next month's production needs in Ending Raw Materials (Direct Materials) Inventory.

Required

Prepare a monthly Operating Budget for the first quarter of next year for the following individual Budgets:

1. Sales Budget

2. Production Budget

3. Direct Materials Purchases Budget

1. Units To Be Produced (Schedule 2)
2. x Direct Materials Per Unit
3. Raw (Direct) Materials Needed To Meet Production Budget
4. Desired Ending Raw Materials Inventory
5. Total Raw Materials Needed
6. Less: Beginning Raw (Direct) Materials Inventory
7. Raw (Direct) Materials To Be Purchased (In Units)
8. x Cost Per Unit
9. Raw (Direct) Materials To Be Purchased (In Dollars)

Transcribed Image Text:

Annette Company Sales Budget (Schedule 1) For the Quarter Ended March 31 January February March Total Units x Sales Price Total Sales 2$ %24 %24 %24 24 Annette Company Production Budget (Schedule 2) For the Quarter Ended March 31 January February March Total Sales (Schedule 1) Desired Ending Finished Inventory Total Units Needed Less: Beginning Finished Goods Inventory Units To Be Produced