Fuqua Company’s sales budget projects unit sales of part 198Z of 10,000 units in Jnauary, 12,000 units in february, and 13,000 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 205 of the next months expected unit sales. These goals were met at December 31, 2016Instructions(a) Prepar a production budget for January and February 2017(b) Prepar a direct materials budget for January 2017.
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