Catalina Inc. produces tents used for camping. Unit sales last year, ending December 31, follow. First quarter: 6,000 Second quarter: 10,000 Third quarter: 12,000 Fourth quarter: 8,000 Unit sales are expected to increase 30 percent this coming year over the same quarter last year. Average sales price per tent will remain at $300.

Assume finished goods inventory is maintained at a level equal to 10 percent of the next quarter’s sales. Finished goods inventory at the end of the fourth quarter budget period is estimated to be 1,900 units.

Required

a. Prepare a sales budget for Catalina Inc. using a format similar to Exhibit 9.1. Be sure to increase last year’s unit sales by 30 percent.

b. Prepare a production budget for Catalina Inc. using a format similar to Exiibit.9.2.

Exhibit 9.1

Exhibit 9.2

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Sales Budget for Jerry's Ice Cream Jerry's Ice Cream Sales Budget Year Ending December 31 Sales in units (1 unit = 1 gallon) Sales price per unit Sales revenue 1 40,000 X $6 $240,000 Quarter 2 3 48,000 60,000 X $6 $288,000 X $6 $360,000 4 52,000 X $6 $312,000 Year 200,000 X $6 $1,200,000