Question

Production and Purchases Budgets in UnitsAt the end of business on June 30, 2017, the PE Rug Company had 150,000 square yards of rugs and 650,000 pounds of raw materials on hand. Budgeted sales for the third quarter of 2017 are:
Col1 Month July August September Otober
Col2 Sales 260,000 sq. yards 230,000 sq. yards 190,000 sq. yards 210,000 sq. yards

The PE Rug Company wants to have sufficient square yards of finished product on hand at the end of each month to meet 40 percent of the following month's budgeted sales and sufficient pounds of raw materials to meet 30 percent of the following month's production requirements. Five pounds of raw materials are required to produce one square yard of carpeting.Prepare a production budget for the months of July, August, and September and a purchases budget in units for the months of July and August.

Answer 1

Answer

The answer and procedures of the exercise are attached in the following archives.

Notes: All working are part of answer and provided as an ‘Equation Column’

BOLDED portion is the part of required answer

Requirement 1: Budgeted Production in Sq. yards

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

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