Glenvale Furniture has projected sales of its product for the next six months as follows.

The product sells for $120, variable expenses are $90 per unit and fixed expenses are $1500 per month. The finished product requires 3 units of raw material and 10 hours of direct labour. The company tries to maintain an ending inventory of finished goods equal to the next two months of sales and an ending inventory of raw materials equal to half of the current month’s usage.

Required
(a) Prepare a production budget for February, March and April.
(b) Prepare a forecast of the units of direct materials required for February, March and April.
(c) Prepare a direct labour hours budget for February, March and April.

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January February March April May June 80 units 180 units 200 units 160 units 60 units 140 units