Bonita Enterprises is a boutique guitar manufacturer. The company produces both acoustic and electric guitars for rising and established professional musicians. Jennifer Davis, the company's sales manager, prepared the following sales forecast for 2022. The forecasted sales prices include a 5% increase in the acoustic guitar price and a 10% increase in the electric guitar price, to cover anticipated increases in raw materials prices. Sales Price $1,250 $2,050 Acoustic guitar sales Electric guitar sales 1st Quarter 230 400 2nd Quarter 290 350 3rd Quarter 320 4th Quarter 340 360 320 Each acoustic guitar requires a maple neck blank, which Bonita purchases for $30. On December 31, 2021, Bonita had 200 neck blanks in inventory. The production process results in a standard quantity of 1 neck per acoustic guitar. Because of recent delivery problems, Bonita wants to maintain an ending inventory equal to 50% of the following quarter's production needs. Since the supplier has assured Bonita that the delivery issues will be resolved by the end of December, Bonita wants only 150 neck blanks in inventory on December 31, 2022. Prepare the purchases budget for neck blanks for 2022. 1st Quarter Purchases Budget 2nd Quarter 3rd Quarter $ $ $ $ $ $ Each acoustic guitar requires a maple neck blank, which Bonita purchases for $30. On December 31, 2021, Bonita had 200 neck blanks in inventory. The production process results in a standard quantity of 1 neck per acoustic guitar. Because of recent delivery problems, Bonita wants to maintain an ending inventory equal to 50% of the following quarter's production needs. Since the supplier has assured Bonita that the delivery issues will be resolved by the end of December, Bonita wants only 150 neck blanks in inventory on December 31, 2022. Prepare the purchases budget for neck blanks for 2022. Purchases Budget 2nd Quarter 3rd Quarter 4th Quarter Annual $ $ $ $ $ $ Each acoustic guitar requires a maple neck blank, which Boni neck blanks in inventory. The production process results in a recent delivery problems, Bonita wants to maintain an ending needs. Since the supplier has assured Bonita that the delivery only 150 neck blanks in inventory on December 31, 2022. Pre 1st Quarter Budgeted production Budgeted purchases (necks) Budgeted ending inventory Production needs Standard necks per guitar Beginning inventory Budgeted purchases cost Standard price per neck Total DM required (necks) On December 31, 2021, Bonita had 30 acoustic guitars in stock-fewer than the desired inventory level of 92 guitars, based on the following quarter's sales. The company has budgeted for sales of 240 acoustic guitars in the first quarter of 2023. Prepare the 2022 production budget for acoustic guitars, Production Budget 2nd Quarter 3rd Quarter 1st Quarter 290 320 230 Budgeted unit sales 116 128 136 Budgeted ending inventory 346 418 456 Total units required 30 116 1 128 Beginning inventory 316 302 328 Budgeted production On December 31, 2021, Bonita had 30 acoustic guitars in stock-fewer than the desired inventory level of 92 guitars, based on the following quarter's sales. The company has budgeted for sales of 240 acoustic guitars in the first quarter of 2023. Prepare the 2022 production budget for acoustic guitars. Production Budget 2nd Quarter 3rd Quarter 4th Quarter Annual 290 320 340 1.18 128 136 96 94 418 456 436 1.276 116 128 136 30 302 328 300 1.246
