# FN3140: Module 5 Budget and Capital Decisions

FN3140: Module 5 Budget and Capital DecisionsExercise 5.2Preparing Operating Budgets1Snip and Chip Inc. sells silk upholstery curtains for \$150 each. The project’s budgeted unit sales for fourmonths during the current year appear below:February \$39,000April \$42,000May \$44,000June \$40,000Additional information:? The project desires to have an inventory at the end of each month equal to 15 percent of thefollowing month’s budgeted unit sales.? Each curtain requires 2.0 yards of fabric.? At the end of each month, the project decides to have 20 percent of the production materialrequired for the next month on hand.? The fabric costs \$25 per yard. Each curtain produced requires 1 hour of direct labor.? The project pays \$27 per hour to its employees.Prepare the following budgets for the project:? Production budget for the month of April? Materials purchase budget for AprilSubmission Requirements:? Answer each problem in detail with conclusions and results.? Submit the calculations in a Microsoft Excel file, showing step-by-step calculations.? Submit the responses in a Microsoft Word document meeting the following criteria:o Font: Arial, Size: 12 pointo Length: 2–3 pagesEvaluation Criteria:The exercise rubric will be used to evaluate your responses.

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