Question:
Preparing production budget and direct materials budget
The sales department of P. Gillen Manufacturing Company has forecast sales in March to be 20,000 units. Additional information follows:
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Finished goods inventory, March 1
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3,000 units
|
|
Finished goods inventory required, March 31
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1,000 units
|
|
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Inventory 1-Mar
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Inventory Required
31-Mar
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Standard Cost
|
|
A (one gallon per unit)
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500 gal
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1,000 gal
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$2 per gal
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|
B (one pound per unit)
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1,000 lb
|
1,000 lb
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$1 per lb
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Prepare the following:
a. A production budget for March (in units).
b. A direct materials budget for the month (in units and dollars).