Fuqua Company’s sales budget projects unit sales of part 198Z of 10,000

by | Mar 18, 2020 | Uncategorized

  

E9-12Fuqua Company’s sales budget projects unit sales of part 198Z of 10,000 units in January, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z re- quires 4 pounds of materials, which cost $2 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 20% of the next month’s expected unit sales. These goals were met at December 31, 2013.

Instructions

(a) Prepare a production budget for January and February 2014.

(b) Prepare a direct materials budget for January 2014.

  

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