Fuqua Company’s sales budget projects unit sales of part 198Z of10,300 units in January, 12,600 units in February, and 13,800 unitsin March. Each unit of part 198Z requires 3 pounds of materials,which cost $4 per pound. Fuqua Company desires its ending rawmaterials inventory to equal 40% of the next month’s productionrequirements, and its ending finished goods inventory to equal 20%of the next month’s expected unit sales. These goals were met atDecember 31, 2019.

(a)

Prepare a production budget for January and February 2020.

FUQUA COMPANY Production Budget                                                                   For the TwoMonths Ending February 28, 2020For the Quarter Ending February 28,2020For the Month Ending January 31, 2020
		January		February
DirectMaterials PurchasesUnits To Be ProducedTotal Cost of DirectMaterials PurchasesTotal Materials RequiredCost Per PoundExpectedUnit SalesDirect Material Pounds Per UnitRequired ProductionUnitsBeginning Finished Goods InventoryDesired Ending FinishedGoods InventoryBeginning Direct MaterialsDesired Pounds in EndingMaterials InventoryTotal Required UnitsTotal Pounds Needed forProduction
AddLess:                                                                  Direct Material Pounds Per UnitTotal Required UnitsCost PerPoundDesired Pounds in Ending Materials InventoryTotal MaterialsRequiredUnits To Be ProducedBeginning Direct MaterialsBeginningFinished Goods InventoryDirect Materials PurchasesTotal Cost ofDirect Materials PurchasesDesired Ending Finished GoodsInventoryRequired Production UnitsTotal Pounds Needed forProductionExpected Unit Sales
Units To BeProducedCost Per PoundBeginning Finished Goods InventoryTotalMaterials RequiredTotal Required UnitsDirect MaterialsPurchasesDesired Ending Finished Goods InventoryTotal Cost ofDirect Materials PurchasesTotal Pounds Needed for ProductionDirectMaterial Pounds Per UnitRequired Production UnitsExpected UnitSalesDesired Pounds in Ending Materials InventoryBeginning DirectMaterials
AddLess:                                                                  Total Required UnitsExpected Unit SalesBeginning DirectMaterialsTotal Materials RequiredBeginning Finished GoodsInventoryTotal Cost of Direct Materials PurchasesDirect MaterialPounds Per UnitUnits To Be ProducedCost Per PoundDesired Pounds inEnding Materials InventoryRequired Production UnitsDirect MaterialsPurchasesTotal Pounds Needed for ProductionDesired Ending FinishedGoods Inventory
RequiredProduction UnitsTotal Pounds Needed for ProductionExpected UnitSalesDesired Ending Finished Goods InventoryDirect Material PoundsPer UnitUnits To Be ProducedBeginning Direct MaterialsBeginningFinished Goods InventoryCost Per PoundTotal Required UnitsDesiredPounds in Ending Materials InventoryTotal Materials RequiredDirectMaterials PurchasesTotal Cost of Direct Materials Purchases