Response to the following problem:
Katy Co. has the following budgeted unit sales for the next six-month period:
|
Month
|
July
|
Aug.
|
Sept.
|
Oct.
|
Nov.
|
Dec.
|
|
Unit Sales
|
500
|
480
|
530
|
550
|
580
|
500
|
Finished goods in inventory on December 1 (in units) 150 units
Required ending inventory as% of the next month's sales 20%
Materials required for each unit produced (in lbs) 10 lbs
Material Costs per pound $10.00
Inventory levels for materials as % of the next month's needs 30%
Materials inventory on December 1 (in lbs) 1,000 lbs
Required:
a) Prepare production budgets in units for September, October, and November.
b) Prepare a purchases budget in both pounds and dollars for September, October.