february 700 units of sales 1900 units desired


February
700 units of sales
+1900 units desired ending inventory
=2600
-800 beginning inventory
=800 units to be produced
2 (Production, direct materials, and direct labor budgets) Gerrad Manufacturing has projected sales of its product for the next six months as given:

January 300 units
February 700 units
March 1,000 units
April 900 units
May 400 units
June 300 units

The finished product needs 3 pounds of raw material and 10 hours of direct labor.

Gerrad tries to maintain a Finished Goods ending inventory equal to the next two months of sales and a Raw Material ending inventory equal to one-half of the present month's production needs. January's starting inventories are expected to conform to company policy.

a. Make a production budget for February, March, and April.

b. Make a forecast of the units and cost of raw material that will be required for February, March, and April. The expected cost per pound of raw material is expected to be $2 in February, $2.30 in March, and $2.40 in April

c. Create a direct labor budget (assuming a $12 per hour rate) for February, March, and April.

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Financial Accounting: february 700 units of sales 1900 units desired
Reference No:- TGS0484476

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