The sales department C. Coles Manufacturing Co. has forecast sales in March to be 20,000 units. Additional information follows:
Finished Goods inventory, March 1...........................3,000 units
Finished Goods inventory required March 31................1,000 units
Materials in production:
Inventory Required inventory
March 1 March 31 Standard Cost
A (one gallon per unit) 500 gal 1,000 gal $2 per gal
B (one pound per unit) 1,000 gal 1,000 lbs $1 per lb
Prepare the following:
a. A production budget for March (in units).
b. A direct materials budget for the month (in units and dollars).