Question
Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and the standard sells for $10. Projected sales of the
Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and the standard sells for $10. Projected sales of the two models for the coming four quarters are given below.
| Deluxe | Standard | |
| First quarter | 11,000 | 90,000 |
| Second quarter | 14,500 | 88,200 |
| Third quarter | 16,500 | 92,000 |
| Fourth quarter | 20,000 | 91,400 |
The president of the company believes that the projected sales are realistic and can be achieved by the company. In the factory, the production supervisor has received the projected sales figures and gathered information needed to compile production budgets. He found that 1,300 deluxes and 1,170 standards were in inventory on January 1. Company policy dictates that ending inventory should equal 20 percent of the next quarters sales for deluxes and 10 percent of next quarters sales for standards.
Required:
Question Content Area
1. Prepare a sales budget for each quarter and for the year in total. Show sales by product and in total for each time period.
| Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Year | |||||
| Deluxe: | |||||||||
| Units | fill in the blank |
| fill in the blank | fill in the blank | fill in the blank | ||||
| Unit price | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | ||||
| Sales | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | ||||
| Standard: | |||||||||
| Units | fill in the blank | fill in the blank | fill in the blank | fill in the blank | fill in the blank | ||||
| Unit price | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | ||||
| Sales | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | ||||
| Total Sales | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank | $fill in the blank |
Question Content Area
2. Prepare a separate production budget for each product for each of the first three quarters of the year.
Production budget for deluxes:
| Quarter 1 | Quarter 2 | Quarter 3 | |
|---|---|---|---|
| Unit sales | fill in the blank | fill in the blank | fill in the blank |
| Desired ending inventory OR Less: Beginning inventory OR Units produced OR unit sales | - Select - | - Select - | - Select - |
| Total needed | fill in the blank | fill in the blank | fill in the blank |
| Desired ending inventory OR Less: Beginning inventory OR Units produced OR unit sales | - Select - | - Select - | - Select - |
| Units produced | fill in the blank | fill in the blank | fill in the blank |
Question Content Area
The production budget for standards:
| Quarter 1 | Quarter 2 | Quarter 3 | |
|---|---|---|---|
| Unit sales | fill in the blank | fill in the blank | fill in the blank |
| Desired ending inventory OR Less: Beginning inventory OR Units produced OR unit sales | - Select - | - Select - | - Select - |
| Total needed | fill in the blank | fill in the blank | fill in the blank |
| Desired ending inventory OR Less: Beginning inventory OR Units produced OR unit sales | - Select - | - Select - | - Select - |
| Units produced | fill in the blank | fill in the blank | fill in the blank |
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1st Edition
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