RBI Company produces baseball bats. Each bat requires 4 pounds of aluminum alloy. Management predicts that 10,000 bats and 28,000 pounds of aluminum alloy will be in inventory on March 31 of the current year and that 100,000 bats will be sold during this year’s second quarter. Management wants to end the second quarter with 3,000 finished bats and 2,000 pounds of aluminum alloy in inventory. Aluminum alloy can be purchased for $3 per pound.
Required
1. Prepare the second-quarter production budget for bats.
2. Prepare the second-quarter direct materials (aluminum alloy) budget; include the dollar cost of purchases.
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