Question - Fuqua Company's sales budget projects unit sales of part 198Z of 10,000 units in Jnauary, 12,000 units in February, and 13,000 units in March. Each unit of part 198Z requires 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 205 of the next months expected unit sales. These goals were met at December 31, 2016
Instructions
(a) Prepare a production budget for January and February 2017.
(b) Prepare a direct materials budget for January 2017.