Froto made the following budget for the first several months
sales units
Jan:10000 40% collected month of sale 60% collected next month
Feb:12000
Mar:14000
April:15000
selling price $25 per unit
Material 2 yards of material needed for each product produced $1 per yard
Labor 1/2 hour per unit at $8 per hour
variable cost $2 per unit
fixed costs $10,000 per month
Froto wants ending inventory of finished goods 10% of next month expected sales
Froto wants ending inventory of materials 15% of next months needs
Material is paid 1/4 in month acquired 3/4 next month
labor paid 1/2 month incurred rest next month
variable and fixed overhead paid in month incurred
REQUIRED: A) PREPARE A PRODUCTION BUDGET IN UNITS FOR JANUARY AND FEBRUARY
B)PREPARE A MATERIAL BUDGET IN UNITS
C) PREPARE A LABOR BUDGET IN DOLLARS AND HOURS
D) PREPARE A CASH BUDGET FOR
FOR JANUARY AND FEBRUARY
