Question
Chapter 22 Budget EOC Complete this project as a separate word or pdf file Submit as a Canvas Assignment at the course website Clearly Print
Chapter 22 Budget EOC
Complete this project as a separate word or pdf file
Submit as a Canvas Assignment at the course website
Clearly Print Your Name and Assignment Name at the top of each page
Tinas Fine Juices is a bottler of orange juice. The company produces bottled orange juice from fruit concentrate purchased from suppliers in Arizona and California. The only ingredients in the juice are water and concentrate. The juice is blended, pasteurized and bottled for sale in 12 ounce plastic bottles. The process is heavily automated and is centered on five machines that control the mixing and bottling of the juice. Each machine is run by one employee and can process 10 bottles of juice per minute, or 600 bottles per hour.
The juice is sold by several grocery stores under their store brand name and in smaller restaurants, delis, and bagel shops. Tina has been in business for several years and uses a sophisticated sales forecasting model based on prior sales, expected changes in demand, and economic factors affecting the industry. Sales of juice are highly seasonal, peaking in the first quarter of the year. Forecasted sales, in bottles, for the first quarter are as follows:
January February March
250,000 325,000 450,000
Tina sells the juice for $1.05 per bottle, in cases of 50 bottles.
In proper order and form, project a sales budget for the 1st quarter.
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_________________________________________________
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January February March 1st Qtr
Forecasted Units _________ _________ _________ _________
Unit Selling Price _________ _________ _________ _________
Budgeted Sales _________ _________ _________ _________
Budget EOC
Production Budget
Tina tries to maintain at least 10% of next months sales forecast in inventory at the end of each month. Because sales have been projected to increase dramatically, the company does not want to run the risk of running out of juice to customers.
The beginning inventory for January was 25,000 bottles, and April sales are forecasted at 500,000 bottles.
In proper order and form, project a production budget for the 1st quarter. Assume all of the information from the sales budget still applies.(ROUND ALL CALCULATIONS TO THE NEAREST WHOLE DOLLAR)
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_________________________________________________
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January February March 1st Qtr
Budgeted Sales (Units or $)? _________ _________ _________ _________
Desired Ending Inventory _________ _________ _________ _________
Total Production Needs _________ _________ _________ _________
Less: Beginning Inventory _________ _________ _________ _________
Required Production _________ _________ _________ _________
Budget Project
Direct Materials Budget
Tina needs to prepare two purchases budgets; one for concentrate used in the orange juice and one for the bottles that are purchased from outside suppliers. (NOTE: YOU ARE ONLY REQUIRED TO COMPLETE A PURCHASES BUDGET FOR CONCENTRATE.)
It takes one gallon of orange concentrate for every 32 bottles of finished product. Each gallon of concentrate costs $4.80. It takes one bottle for each unit produced. Each bottle costs $0.10.
Tina requires that 20% of next months direct materials need to be on hand at the end of each budget period.
Projected orange concentrate needed for April is 15,315 gallons.
Projected bottles needed for April is 490,000.
January beginning inventory of orange concentrate is 1,609 gallons.
January beginning inventory of bottles is 51,500.
In proper order and form, project a direct materials budget for concentrate (YOU ARE NOT REQUIRED TO COMPLETE A BUDGET FOR BOTTLES) Assume all of the information from the sales/production budgets still applies.
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_________________________________________________
_________________________________________________
January February March 1st Qtr
Units to be Produced _________ _________ _________ _________
Bottles Per Gallon _________ _________ _________ _________
Production Needs _________ _________ _________ _________
Add: Desired Ending Inventory _________ _________ _________ _________
Total Budget Needs _________ _________ _________ _________
Less: Beginning Inventory _________ _________ _________ _________
Concentrate to be Purchased _________ _________ _________ _________
Cost Per Gallon _________ _________ _________ _________
Total Purchase Cost _________ _________ _________ _________
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