Prepare the production budget for the first quarter of 2014.

Prepare the production budget for the first quarter of 2014.

a) The Terry Towels Manufacturing Company has estimated its sales budget at 500,000
units for the quarter ending March 31, 2014. Anticipated sales for January, February and
March are 37.5%, 25% and 37.5% of the total, respectively. The desired finished goods
inventories are:
Month Units
January 1 90,000
January 31 87,500
February 28 93,000
March 31 95,000
Required:
Prepare the production budget for the first quarter of 2014.
b) Jumbo Juice Factory has estimated its 2014 production requirements to be a follows:
Month Units
April 1,500
May 2,000
June 2,500
July 2,800
The company wants a direct materials ending inventory of 35% of the next
month’s production.
The price per unit is $20 and it takes one unit of direct materials to produce one of
finished goods.
Prepare a direct materials purchase budget for the second quarter of 2014.
(15 marks )
[ Total 25 marks ]( 10 marks )


 

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