90.2K

Verified Solution

Link Copied!

Fantastic Futons manufactures futons. The estimated number of futon sales for the first three months of 2014 are as follows:

January	40,000
February	50,000
March	60,000

Finished goods inventory at the end of 2013 was 10,000 units. On average, 25 percent of the futons to be sold in the next month are produced and kept as ending balance in finished goods inventory. The planned selling price is $150 per unit.

Please show all work

What would be the sales budget for March of Fantastic Futons?

a.	$7,200,000
b.	$8,000,000
c.	$6,750,000
d.	$9,000,000

How many futons should be produced in January by Fantastic Futons to fulfill the sales projections and maintain inventory?

a.	44,500
b.	28,000
c.	42,500
d.	52,500

How many futons should be produced in February by Fantastic Futons to fulfill the sales projections and maintain inventory?

a.	37,500
b.	65,000
c.	52,500
d.	55,000

Fantastic Futons buys direct materials for the futons in cloth rolls priced at $80 each. Each roll provides direct material for 40 futons. There was one roll in the direct materials inventory at the beginning of January, and the company expects to have four rolls in inventory at the end of the month. Assuming the production budget calls for 60,000 units to be produced in January, what would be the amount of the cloth rolls direct materials purchases budget for that month?

a.	$119,760
b.	$114,000
c.	$120,000
d.	$120,240

Answer & Explanation Solved by verified expert

See Answer