Question
Part 1 Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first 3 months of the
Part 1
Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first 3 months of the coming year:
January | 41,000 |
February | 38,000 |
March | 50,000 |
The average price for a drum is $43.
Required:
Prepare a sales budget for the first 3 months of the coming year, showing units and sales revenue by month and in total for the quarter. Do not include a multiplication symbol as part of your answer.
Patrick Inc. | ||||
Sales Budget | ||||
For the Coming Quarter | ||||
January | February | March | 1st Quarter Total | |
Units | ||||
Price | $ | $ | $ | $ |
Sales | $ | $ | $ | $ |
Part 2
Preparing a Production Budget
Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales:
January | 41,000 |
February | 38,000 |
March | 50,000 |
April | 51,000 |
Patrick's policy is to have 16% of next month's sales in ending inventory. On January 1, it is expected that there will be 4,600 drums of solvent on hand.
Required:
Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total. If required, round your answers to the nearest whole unit.
Patrick Inc. | ||||
Production Budget | ||||
For the Coming Quarter | ||||
January | February | March | 1st Quarter Total | |
Sales | ||||
Desired ending inventory | ||||
Total needs | ||||
Less: Beginning inventory | ||||
Units to be produced |
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