Question
Question 1. James Company is preparing budgets for the Third quarter of 2019. All relevant information is presented below. A. James Company expects sales as
Question 1. James Company is preparing budgets for the Third quarter of 2019. All relevant information is presented below.
A. James Company expects sales as shown below:
|
| Budgeted Sales (Units) |
| July | 25,000 |
| August | 28,000 |
| September | 36,000 |
| October | 42,000 |
| November | 50,000 |
| December | 58,000 |
The sales price is $32 per unit. The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units.
- Prepare a sales budget for the third quarter, in total, October by month.
| 2019 | |||||
|
| July | August | September | Q3 Total | October |
| Budgeted sales in units | 25,000 | 28,000 | 36,000 |
| 42,000 |
| Sales Price Per Unit |
|
|
|
|
|
| Total Budget Sales |
|
|
|
|
|
B. James Company is preparing a production budget for the third quarter. Ending inventory level must equal 15% of the next months sales.
- Prepare a production budget for the third quarter, in total, October and November by month.
| 2019 | ||||||
|
| July | August | September | Q3 Total | October | November |
| Next Month Budget Sale |
|
|
|
|
|
|
| Ratio of Inventory |
|
|
|
|
|
|
| Desired Units in Ending inventory |
|
|
|
|
|
|
| Plus: Budgeted sales in units |
|
|
|
|
|
|
| Total Units Needed |
|
|
|
|
|
|
| Less: Units in Beginning Inventory |
|
|
|
|
|
|
| Budgeted units to be Produced |
|
|
|
|
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started