Butler Corp

Essay

Butler Corp.has forecast sales for the next four months as follows: July 14,000 units,August 16,000 units,September 17,500 units,October 18,000 units.Butler's policy is to have an ending inventory of 20% of the next month's sales needs on hand.July 1 inventory is projected to be 2,500 units.Manufacturing overhead is budgeted to be $18,000 (depreciation $2,000,supervision $7,000,factory lease $1,500,maintenance $4,000,training $3,500)plus $5 per unit produced ($3 indirect materials,$2 utilities).
a.Prepare a production budget for Butler for as many months as is possible.
b.Prepare a manufacturing overhead budget for the three months July through September.Be sure to include a total for the quarter as well.