Fuque Company's sales budget projects unit sales of part 1982 of 10,300 units in January, 12,500 units in February, and 13,400 units in March. Each unit of part 1982 requires 4 pounds of materials, which cost $5 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2016. (a) Prepare a production budget for January and February 2017. FUQUA COMPANY Production Budget (b) Prepare a direct materials budget for January 2017. FUQUA COMPANY Direct Materials Budget January January February
Fuque Company's sales budget projects unit sales of part 1982 of 10,300 units in January, 12,500 units in February, and 13,400 units in March. Each unit of part 1982 requires 4 pounds of materials, which cost $5 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2016. (a) Prepare a production budget for January and February 2017. FUQUA COMPANY Production Budget (b) Prepare a direct materials budget for January 2017. FUQUA COMPANY Direct Materials Budget January January February
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Fuque Company's sales budget projects unit sales of part 1982 of 10,300 units in January, 12,500 units in February, and 13,400 units in March. Each unit of part 1982 requires 4 pounds of materials, which cost $5 per pound. Fuqua Company desires its
ending raw materials inventory to equal 40% of the next month's production requirements, and its ending finished goods inventory to equal 20% of the next month's expected unit sales. These goals were met at December 31, 2016.
(a)
Prepare a production budget for January and February 2017.
FUQUA COMPANY
Production Budget
(b)
Prepare a direct materials budget for January 2017.
FUQUA COMPANY
Direct Materials Budget
January
January
February
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