| Use the following information to answer all five questions | ||||||||
| Gerrad Manufacturing has projected sales for the next four months are shown in the tables below. The finished product requires 3 pounds | ||||||||
| of raw materials and 10hours of direct labor. Gerrad tries to maintain a finished good ending inventory equal to the next two months of | ||||||||
| sales and a raw material ending inventory equal to one half of the current month’s production needs.January’s beginning inventories | ||||||||
| are expected to conform to company policy. | ||||||||
| a. prepare a production budget for February,March, and April | ||||||||
| b. Prepare a forecast of the units and cost of raw material that will be required for February, March, and April. The expected cost per pound | ||||||||
| of raw mateial is expected to be $2 in February, $2.30 in March, and $2.40 in April. | ||||||||
| c. Prepare a direct labor budget (assuming a $12 per hour rate) for February, March, and April. | ||||||||
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