Question

White Corporation’s budget calls for the following sales for next year: Quarter 1 98,000 units Quarter...

White Corporation’s budget calls for the following sales for next year:

Quarter 1 98,000 units Quarter 3 68,400 units
Quarter 2 83,000 units Quarter 4 99,600 units

Each unit of the product requires 2 pounds of direct materials. The company’s policy is to begin each quarter with an inventory of product equal to 5% of that quarter’s estimated sales requirements and an inventory of direct materials equal to 20% of that quarter’s estimated direct materials requirements for production.

Required:

1. Determine the production budget for the second quarter.

2. Determine the materials purchases budget for the second quarter.

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