The production department of Priston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Units to be produced 6,000 7,000 8,000 5,000
In addition, the beginning raw materials inventory for the 1st Quarter is budgeted to be 3,600 pounds and the beginning accounts payable for the 1st Quarter is budgeted to be $11,775.
Each unit requires three pounds of raw material that costs $2.50 per pound. Management desires to end each quarter with a raw materials inventory equal to 20% of the following quarter
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