A company has the following data to prepare the budgets for 2023:

• Budgeted Sales units: 1^st Qtr 5,000; 2^nd Qtr 5,500; 3^rd Qtr 6,000
• Desired Ending Finished Goods Inventory: 20% of next Qtr Sales
• Desired Ending Raw Material Inventory: 30% of next Qtr Production
• Beginning Inventory Balances for Production and Material follow the same percentage relationships
• Each unit requires 2 pounds of material, at $5 per pound

Answer the following questions based on the data above in developing Production and Direct Material budgets:

1. Compute the Production Units Required for Qtr 1
2. Compute the Production Units Required for Qtr 2
3. Compute the total pounds of Direct Material Purchases for Qtr 1
4. Compute the total cost of Direct Material Purchases for Qtr 1

Answer rating: 100% (QA)

To calculate the production units required for each quarter we need to consider the desired ending f... View the full answer