Kason, Inc., expects to sell 18,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
Beginning inventory Ending inventory
Direct materials 22,000 units 18,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,200 units 2,600 units
Prepare a production budget and a direct- materials purchase budget. Each pool cue uese 3 pices of dirct material.