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Do It! Review 23-2 Your answer is partially correct. Try again Pargo Company is preparing its master budget for 2017. Relevant data pertaining to its sales, production, and direct materials budgets are as follows Sales, Sales for the year are expected to total 1,700,000 units. Quarterly sales are 22%, 27%, 27%, and 24%, respectively. The sales price is expected to be $42 per unit for the first three quarters and $45 per unit beginning in the fourth quarter. Sales in the first quarter of 2018 are expected to be 15% higher than the budgeted sales for the first quarter of 2017 Production, Management desires to maintain the ending finished goods inventories at 20% of the next quarter's budgeted sales volume Direct materials. Each unit requires 2 pounds of raw materials at a cost of $12 per pound. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for first quarter of 2018 are 493,000 pounds Prepare the sales, production, and direct materials budgets by quarters for 2017 PARGO COMPANY Sales Budget For the Year Ending December 31, 2017 Quarter 2 3 Year Expected unit sales 374,000 459,000 459,000 408,000 1,700,000 42 42 42 45 Unit selling price Total sales 15,708,000 19,278,000 19,278,000 18,360,000 72,624,000