Question: 1. Why should each department participate in preparing its own budget?
2. Zyton Corp. budgets production of 292 units in January and 264 units in February. Each finished unit requires five pounds of raw material Z, which costs $6 per pound. Each month's ending inventory of raw materials should be 30% of the following month's budgeted production. The January 1 raw materials inventory has 438 pounds of Z. Prepare a direct materials budget for January.