Production and purchases budgets
Caleb Corp. has prepared the following unit sales forecast for 2014:
Estimated ending Finished Goods Inventories are 50,000 units at December 31, 2013; 72,000 units at June 30, 2014; and 120,000 units at December 31, 2014.
In manufacturing a unit of this product, Caleb Corp. uses 3 pounds of Material A and 0.75 gallons of Material B. Materials A and B cost, respectively, $2.50 per pound and $1.80 per gallon.
The company carries no Work in Process Inventory. Ending inventories of direct material are projected as follows:
Prepare a production and purchases budget for each semiannual period of 2014.
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Production Budget - 2014:
Caleb Corp.
Production Budget
For the Year 2014
January-June
July-December
Total
Sales budget
Ending inventory
Beginning inventory
Production
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Material A Purchases Budget - 2014:
Caleb Corp.
Material A Purchases Budget
For the Year 2014
January-June
July-December
Total
Production
Number of pounds
Production budget
Ending inventory
Beginning inventory
Purchases
Times cost per pound
$
$
$
Total cost
$
$
$
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Material B Purchases Budget - 2014:
Caleb Corp.
Material B Purchases Budget
For the Year 2014
January-June
July-December
Total
Production
Number of gallons
Production budget
Ending inventory
Beginning inventory
Purchases
Times cost per gallon
$
$
$
Total cost
$
$
$