Clingy Company has budgeted the following unit sales for the first five months of 2012: $\begin{array} { l l }
\text { January } & 14,000 \
\text { February } & 12,000 \
\text { March } & 11,000 \
\text { April } & 16,000 \
\text { May } & 13,000
\end{array}$ Each unit requires 2 metres of fabric which is estimated to cost $3.50 per metre. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales.
Clingy Company also have a policy of maintaining a raw materials inventory at the end of each month equal to 10% of the metres needed for the following month's production. There were 1,200 metres of fabric on hand at March 1.
Required:
A. Prepare a production budget for Clingy Company for March.
B. Prepare a direct materials budget for Clingy Company for March

Question

Clingy Company has budgeted the following unit sales for the first five months of 2012: $\begin{array} { l l } 
\text { January } & 14,000 \
\text { February } & 12,000 \
\text { March } & 11,000 \
\text { April } & 16,000 \
\text { May } & 13,000
\end{array}$ Each unit requires 2 metres of fabric which is estimated to cost $3.50 per metre. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales.
Clingy Company also have a policy of maintaining a raw materials inventory at the end of each month equal to 10% of the metres needed for the following month's production. There were 1,200 metres of fabric on hand at March 1.
Required:
A. Prepare a production budget for Clingy Company for March.
B. Prepare a direct materials budget for Clingy Company for March

Quizplus · Accepted Answer

The Answer of Clingy Company has budgeted the following unit sales for the first five months of 2012: $\begin{array} { l l } 
\text { January } & 14,000 \
\text { February } & 12,000 \
\text { March } & 11,000 \
\text { April } & 16,000 \
\text { May } & 13,000
\end{array}$ Each unit requires 2 metres of fabric which is estimated to cost $3.50 per metre. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales.
Clingy Company also have a policy of maintaining a raw materials inventory at the end of each month equal to 10% of the metres needed for the following month's production. There were 1,200 metres of fabric on hand at March 1.
Required:
A. Prepare a production budget for Clingy Company for March.
B. Prepare a direct materials budget for Clingy Company for March

Clingy Company Has Budgeted the Following Unit Sales for the First