CLINGY COMPANY has budgeted the following unit sales:

Month Budgeted Sales

January 14,000
February 12,000
March 11,000
April 16,000
May 13,000

Production Budget For the Month Ending March 31

March April May
Expected unit sales 11,000 16,000 13,000
Desired ending finished goods units 3,200 2,600
Total required units 14,200 18,600
Less: Beginning finished goods units 2,200 3,200
Required production units 12,000 15,400

Direct Materials Budget For the Month Ending March 31

March April
Units to be produced 12,000 15,400
Direct materials per unit 2 2
Total materials required for production 24,000 30,800
Desired ending inventory of raw materials 3,080
Total materials required 27,080
Beginning inventory 1,200
Material purchases 25,880
Cost per unit 3.5 3.5
Total cost of direct materials purchases 90,580
Exercise 183Clingy Company budgeted the following unit:
sales:January14,000February12,000March11,000April16,000
May13,000
Each unit requires 2 yards of fabric which is estimated to cost
$3.50 per yard. It is the company'spolicy to maintain a finished
goods inventory at the end of each month equal to 20% of
nextmonth's anticipated sales. Clingy Company also have a
policy of maintaining a raw materialsinventory at the end of
each month equal to 10% of the yards needed for the
following month'sproduction. There were 1,200 yards of fabric
on hand at March 1.InstructionsPrepare a production budget
and a direct materials budget for March.
g unit:
pril16,000
ed to cost
n a finished
20% of
o have a
he end of
he
ds of fabric
on budget
Cash budget
Cash beg 25000
Add collection from sales 105000
Total cash available 130000
Less cash disbursements
Suppliers 43800
Selling admin 14000
Dividends 30000
Purchases 3000
Total cash disbursements 90800
Excess(deficiency) 39200
Financing
Borrowing 9140
Repayments -26000
Interest -2340
Total financing -19200
End cash balance 58400