Fuqua company’s sales budget projects unit sales of part 198z of 10,800 units in january, 12,700 units in february, and 13,200 units in march. each unit of part 198z requires 3 pounds of materials, which cost $4 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 projected budget for jan and feb 2017 b: prepare a direct material budget for jan 2017

Production Budget for January:

Required Production Units:

= Expected Unit Sales + Desired Ending Finished Goods Inventory - Beginning Finished Goods Inventory

=  10,800 + (12,700 × 20%) - (10,800 * 20%)

= 10,800 + 2,540 -  2,160

= 11,180

Production Budget for February:

Required Production Units:

= Expected Unit Sales + Desired Ending Finished Goods Inventory - Beginning Finished Goods Inventory

= 12,700 +  (13,200 × 20%) - (12,700 × 20%)

= 12,700 + 2,640 - 2,540

= 12,800

(b) Direct material budget for Jan 2017:

Total Cost of Direct Materials Purchases:

= [Total Pounds needed for Production + Desired Pounds in Ending Direct Materials Inventory - Beginning Direct Materials (Pounds)] × Cost per Pound

= {(11,180 * 3) + [(12,800 * 3) * 40%] - [(11,180 * 3) * 40%]} × 4

= [33,540 +  15,360 -  13,416] × 4

= 35,484 × 4

= $141,936

answer; i believe the correct answer is (4.0);

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o