The management of Morgan Food Products decided to install a budgetary control system under the supervision of a budget director and a committee. Among its products, the company manufactures a patented breakfast food that is sold in packages of two sizes, 1 pound and 2 pound. The cereal is made from two types of grain, R (rye) and S (soy). There are two operations: (a) processing and blending and (b) packaging. The grains are purchased by the bushel measure, a bushel of R containing 70 pounds and a bushel of S containing 80 pounds. Three bushels of grain mixed in the proportion of 2R:1S produce 198 pounds of finished product. The entire loss occurs in the first department.
To prepare estimated sales figures for the first 6 months of the coming year, the budget committee first asked the sales staff to prepare sales estimates in units. The following estimates were submitted:

The budget committee analyzes the estimates in light of general business conditions. The company uses the Federal Reserve Board Index, together with its own trade index, to calculate a trend percentage. The trend percentage indicates that a 90 general index figure should be applied to the estimates to arrive at final sales figures. The finished goods inventory is to be kept at zero, if possible. The work in process inventory is to be kept near the present level, which is about 160,000 pounds of blended material.
Factory facilities are adequate for processing the requirements of the sales budget. The production manager accepted the monthly sales figures for the production budget.
Purchases of grains in bushels have been arranged as follows:

Materials are charged into production on the fifo basis.
Required:
(1) Prepare a revised sales budget in units for the 6-month period, based on the index.
(2) Prepare a sales budget in dollars, assuming the 1-pound package sells for 25 cents and the 2-pound package for 50 cents.
(2) Prepare a schedule of materials purchases.
(4) Prepare a computation of materials requirements for production. (Round to the nearest whole amount.)
(5) Prepare a schedule of the materials account (fifo basis) in units and dollars, indicating beginning inventory, purchases, usage, and ending inventory for the 6-month period taken as a whole.

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6-Month Territory Territory l Territory I OtherTotal 10,000 15,000 12,000 613,000 650,000 2-b. Package. Total 12,000 18000 12.000 783,000 825,000 22,000 33,000 24,000 1,396,000 ,475,000 January February March April Quantity (in bushels)Price Quantity (in bushels $1.30 1.40 ) Price $1.20 1.20 1.25 1.00 5,000 2,000 2,000 1,000 3,000 3,000 0 4,000 8,000 3,000 4,000 1.50 1.50 1.60 June Beginning inventory 1.00 January 1 . 10,000 1.20 3,000 1.00