Question - Caleb Corp. has prepared the following unit sales forecast for 2014:
Estimated ending Finished Goods Inventories are 50,000 units at December 31, 2013; 72,000 units at June 30, 2014; and 120,000 units at December 31, 2014.
In manufacturing a unit of this product, Caleb Corp. uses 3 pounds of Material A and 0.75 gallons of Material B. Materials A and B cost, respectively, $2.50 per pound and $1.80 per gallon.
The company carries no Work in Process Inventory. Ending inventories of direct material are projected as follows:
|
|
December 31, 2013
|
June 30, 2014
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December 31 2014
|
|
Material A
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240,000
|
270,000
|
284,000
|
|
Material B
|
90,000
|
70,000
|
76,000
|
Prepare a production and purchases budget for each semiannual period of 2014.