Sales and Production Budgets

Archer Company produces two products: the custom and the basic. The custom sells for $30, and the basic sells for $8. Projected sales of the two models for the coming four quarters are given below.

	Custom	Basic
First quarter	12,000	90,000
Second quarter	14,500	88,200
Third quarter	16,500	92,000
Fourth quarter	20,000	91,400

The president of the company believes that the projected sales are realistic and can be achieved by the company. In the factory, the production supervisor has received the projected sales figures and gathered information needed to compile production budgets. He found that 800 customs and 1,140 basics were in inventory on January 1. Company policy dictates that ending inventory should equal 20 percent of the next quarter's sales for customs and 10 percent of next quarter's sales for basics.

Required:

Question Content Area

1. Prepare a sales budget for each quarter and for the year in total. Show sales by product and in total for each time period.

Archer Company Sales Budget For the Year Ended December 31

	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Custom:
Units	fill in the blank 94d978fdd03ffbd_1	fill in the blank 94d978fdd03ffbd_2	fill in the blank 94d978fdd03ffbd_3	fill in the blank 94d978fdd03ffbd_4	fill in the blank 94d978fdd03ffbd_5
Unit price	$fill in the blank 94d978fdd03ffbd_6	$fill in the blank 94d978fdd03ffbd_7	$fill in the blank 94d978fdd03ffbd_8	$fill in the blank 94d978fdd03ffbd_9	$fill in the blank 94d978fdd03ffbd_10
Sales	$fill in the blank 94d978fdd03ffbd_11	$fill in the blank 94d978fdd03ffbd_12	$fill in the blank 94d978fdd03ffbd_13	$fill in the blank 94d978fdd03ffbd_14	$fill in the blank 94d978fdd03ffbd_15
Basic:
Units	fill in the blank 94d978fdd03ffbd_16	fill in the blank 94d978fdd03ffbd_17	fill in the blank 94d978fdd03ffbd_18	fill in the blank 94d978fdd03ffbd_19	fill in the blank 94d978fdd03ffbd_20
Unit price	$fill in the blank 94d978fdd03ffbd_21	$fill in the blank 94d978fdd03ffbd_22	$fill in the blank 94d978fdd03ffbd_23	$fill in the blank 94d978fdd03ffbd_24	$fill in the blank 94d978fdd03ffbd_25
Sales	$fill in the blank 94d978fdd03ffbd_26	$fill in the blank 94d978fdd03ffbd_27	$fill in the blank 94d978fdd03ffbd_28	$fill in the blank 94d978fdd03ffbd_29	$fill in the blank 94d978fdd03ffbd_30
Total Sales	$fill in the blank 94d978fdd03ffbd_31	$fill in the blank 94d978fdd03ffbd_32	$fill in the blank 94d978fdd03ffbd_33	$fill in the blank 94d978fdd03ffbd_34	$fill in the blank 94d978fdd03ffbd_35

Question Content Area

2. Prepare a separate production budget for each product for each of the first three quarters of the year.

Production budget for customs:

Archer Company Production Budget for Customs First Three Quarters of the Year

	Quarter 1	Quarter 2	Quarter 3
Unit sales	fill in the blank a471a8fcf035ff3_1	fill in the blank a471a8fcf035ff3_2	fill in the blank a471a8fcf035ff3_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank a471a8fcf035ff3_8	fill in the blank a471a8fcf035ff3_9	fill in the blank a471a8fcf035ff3_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank a471a8fcf035ff3_15	fill in the blank a471a8fcf035ff3_16	fill in the blank a471a8fcf035ff3_17

Question Content Area

Production budget for basics:

Archer Company Production Budget for Basics First Three Quarters of the Year

	Quarter 1	Quarter 2	Quarter 3
Unit sales	fill in the blank c8993bfddfe3066_1	fill in the blank c8993bfddfe3066_2	fill in the blank c8993bfddfe3066_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank c8993bfddfe3066_8	fill in the blank c8993bfddfe3066_9	fill in the blank c8993bfddfe3066_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank c8993bfddfe3066_15	fill in the blank c8993bfddfe3066_16	fill in the blank c8993bfddfe3066_17