1. vassallo inc has the following budgeted sales for the selected

1. Vassallo Inc has the following budgeted sales for the selected six-month period

Month………………………… Unit Sales

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January ………………………15,000

February………………………. 20,000

March ………………………….35,000

April…………………………… 25,000

May…………………………… 30,000

June …………………………..20,000

There were 7,500 units of finished goods in inventory at the beginning of January. Plans are to have an inventory of finished product equal to 20 percent of the unit sales for the next month.

Three pounds of materials are required for each unit produced. Each pound of material costs $20. Inventory levels for materials equal 30 percent of the needs for the next month. Materials inventory on January 1 was 5,000 pounds.

Required:

a. Prepare production budgets in units for February, March, and April.

b. Prepare a purchases budget in pounds and dollars for February, March, and April.

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