(Production and purchases budgets) Caleb Corp. has prepared the following unit sales forecast for 2011:
|
January–June |
July–December |
Total |
|
|
Sales |
1,160,000 |
1,440,000 |
2,600,000 |
Estimated ending Finished Goods Inventories are 50,000 units at December 31, 2010; 72,000 units at June 30, 2011; and 120,000 units at December 31, 2011.
In manufacturing a unit of this product, Caleb Corp. uses 3 pounds of Material A and 0.75 gallons of Material B. Materials A and B cost, respectively, $2.50 per pound and $1.80 per gallon.
The company carries no Work in Process Inventory. Ending inventories of direct material are projected as follows:
|
December 31, 2010 |
June 30, 2011 |
December 31, 2011 |
|
|
Material A (in pounds) |
240,000 |
270,000 |
284,000 |
|
Material B (in gallons) |
90,000 |
70,000 |
76,000 |
Prepare a production and purchases budget for each semiannual period of 2011.