Problem 5-31 Vaughn Enterprises is a boutique guitar manufacturer. The company produces both acoustic and electric guitars for rising and established professional musicians. Vanessa Aaron, the company's sales manager, prepared the following sales forecast for 2018. 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. Acoustic guitar sales Electric guitar sales Sales Price $1,200 $2,350 1st Quarter 190 400 2nd Quarter 250 370 3rd Quarter 310 300 4th Quarter 325 370 Your answer is correct. Prepare Vaughn's sales budget for 2018. Sales Budget 2nd Quarter 1st Quarter 3rd Quarter 4th Quarter Annual Acoustic: 2 Budgeted units sold 250 1075 T Budgeted sales price 4 1200 1200 1200 1200 1200 L 200 1200 | Budgeted revenue 300000 372000 1290000 Electric: Budapted units cold and 7 2017 2017 2017 jaan) Prepare Vaughn's sales budget for 2018. Sales Budget 2nd Quarter 1st Quarter 3rd Quarter 4th Quarter Annual Acoustic: 2 T Budgeted units sold 1075 Budgeted sales prices 1200 12001 1200 1200 Budgeted revenue | 228000 300000 390000 1290000 Electric: Budgeted units sold | 1440 Budgeted sales price 2350) U 2350 Budgeted revenue le 940000 869500 2350 4 705000, (869500) 107700) 1259500) 705000 869500 3384000 Total revenue 1168000 1168000116950), 1169500 1077000 1259500 4674000 4674000 Tour U n Punciun COMICELE yuyun. On December 31, 2017, Vaughn had 30 acoustic guitars in stock-fewer than the desired inventory level of 76 guitars, based on the following quarter's sales. The company has budgeted for sales of 240 acoustic guitars in the first quarter of 2019. Prepare the 2018 production budget for acoustic guitars. Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual Budgeted unit sales 250 1075 T Budgeted ending inventory | 96 X *P Total units required BX Beginning inventory Budgeted production Each acoustic guitar requires a maple neck blank, which Vaughn purchases for $45. On December 31, 2017, Vaughn had 410 neck blanks in inventory. Spoilage during the production process results in a standard quantity of 1.5 necks per acoustic guitar. Because of recent delivery problems, Vaughn wants to maintain an ending inventory equal to 50% of the following quarter's production needs. Since the supplier has assured Vaughn that the delivery issues will be resolved by the end of December, Vaughn wants only 350 neck blanks in inventory on December 31, 2018. Prepare the purchases budget for neck blanks for 2018. (Enter "per guitar" value to 1 decimal place, e.g. 3.1. Round all other answers to 0 decimal places, e.g. 153.) Purchases Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual T Budgeted production 190 3101 T Standard necks per guitar 1 Production needs 4651 487.5 T Budgeted ending inventory 232.5 243.75 350 Total DM required (necks) 4 472.5 607.5 708.75|| 837.5 T Beginning inventory - 410/ 187.5 232.5 243.75 T Budgeted purchases (necks) - 62.5 476.25 593.75 Standard price per neck Standard necks per guitar Production needs 487.5 Budgeted ending inventory 232.5 243.75 350 Total DM required (necks) 607.5 708.75 837.5 T Beginning inventory 1 410) 187.5 232.5 243.75 Budgeted purchases (necks) - 476.25 593.75 Standard price per neck A 1 Budgeted purchases costa 2813 U 18900 L 18900 21431 2 26719 26719 69863
