Answer:
Production Budget Jan 10,640 Feb 12,300
Direct Materials Budget Jan 45216
Explanation:
Production Budget = Sales + Desired Ending Inventory - Opening Inventory
The ending inventory for one month is the opening inventory for the next. We calculate the ending inventory for
Jan= 20% 0f 12000 units= 2400
Feb = 20% of 13500 units= 2700
Marigold Company
Production Budget
Jan Feb March
Sales Units 10,300 12000 13500
Add Desired
Ending Inventory 2400 2700
<u>Less Opening 2060 2400 2700 </u>
<u>Production Budget 10,640 12,300 </u>
<u />
Direct Materials Budget = Production Budget in pounds + Direct Materials Desired Ending Inventory - Opening Inventory Direct Materials
The ending inventory for one month is the opening inventory for the next. We calculate the ending inventory for
Jan= 40% 0f 49,200 units= 19680
Dec = 40% 0f 42,560 units= 17024
Dec Ending Inv= Jan opening Inventory
Marigold Company
Direct Materials Budget
Jan Feb
Production Units 10,640 12300
Pounds per unit 4 4
Production pounds 42,560 49,200
Add Desired
Ending Inventory 19,680
<u>Less Opening 17024 19680 </u>
<u>Direct Materials Budget 45216 </u>
