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Garver Industries has budgeted the following unit sales: \table[[2020,Units],[January,10,000],[February,8,000],[March,9,000],[April,11,000],[May,15,000]] The finished...

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Question

Accounting

Garver Industries has budgeted the following unit sales:
\table[[2020,Units],[January,10,000],[February,8,000],[March,9,000],[April,11,000],[May,15,000]]
The finished goods units on hand on December 31,2019, was 2,000 units. Each unit requires 3 pounds of raw materials that are estimated to cost an average of $4 per pound. 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. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 8,640 pounds of raw materials on hand at December 31,2019.
Instructions
For the first quarter of 2020, prepare:
(1) a production budget (4 marks)
(2) a direct materials budget (4 marks)
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