Clingy Company budgeted the following unit sales: January 14,000, February 12,000, March 11,000, April 16,000, May 13,000. Each unit requires 2 yards of fabric which is estimated to cost $3.50 per yard. 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 yards needed for the following month's production. There were 1,200 yards of fabric on hand at March 1. Instructions: Prepare a production budget and a direct materials budget for March.

Clingy Company budgeted the following unit sales: January 14,000, February 12,000, March 11,000, April 16,000, May 13,000. Each unit requires 2 yards of fabric which is estimated to cost $3.50 per yard. 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 yards needed for the following month's production. There were 1,200 yards of fabric on hand at March 1. Instructions: Prepare a production budget and a direct materials budget for March.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 5EB: Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and...

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