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	14,200	88,600
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 5ad7e8ffffcef80_1	fill in the blank 5ad7e8ffffcef80_2	fill in the blank 5ad7e8ffffcef80_3	fill in the blank 5ad7e8ffffcef80_4	fill in the blank 5ad7e8ffffcef80_5
Unit price	$fill in the blank 5ad7e8ffffcef80_6	$fill in the blank 5ad7e8ffffcef80_7	$fill in the blank 5ad7e8ffffcef80_8	$fill in the blank 5ad7e8ffffcef80_9	$fill in the blank 5ad7e8ffffcef80_10
Sales	$fill in the blank 5ad7e8ffffcef80_11	$fill in the blank 5ad7e8ffffcef80_12	$fill in the blank 5ad7e8ffffcef80_13	$fill in the blank 5ad7e8ffffcef80_14	$fill in the blank 5ad7e8ffffcef80_15
Basic:
Units	fill in the blank 5ad7e8ffffcef80_16	fill in the blank 5ad7e8ffffcef80_17	fill in the blank 5ad7e8ffffcef80_18	fill in the blank 5ad7e8ffffcef80_19	fill in the blank 5ad7e8ffffcef80_20
Unit price	$fill in the blank 5ad7e8ffffcef80_21	$fill in the blank 5ad7e8ffffcef80_22	$fill in the blank 5ad7e8ffffcef80_23	$fill in the blank 5ad7e8ffffcef80_24	$fill in the blank 5ad7e8ffffcef80_25
Sales	$fill in the blank 5ad7e8ffffcef80_26	$fill in the blank 5ad7e8ffffcef80_27	$fill in the blank 5ad7e8ffffcef80_28	$fill in the blank 5ad7e8ffffcef80_29	$fill in the blank 5ad7e8ffffcef80_30
Total Sales	$fill in the blank 5ad7e8ffffcef80_31	$fill in the blank 5ad7e8ffffcef80_32	$fill in the blank 5ad7e8ffffcef80_33	$fill in the blank 5ad7e8ffffcef80_34	$fill in the blank 5ad7e8ffffcef80_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 bd4d86f6a021fc6_1	fill in the blank bd4d86f6a021fc6_2	fill in the blank bd4d86f6a021fc6_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank bd4d86f6a021fc6_8	fill in the blank bd4d86f6a021fc6_9	fill in the blank bd4d86f6a021fc6_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank bd4d86f6a021fc6_15	fill in the blank bd4d86f6a021fc6_16	fill in the blank bd4d86f6a021fc6_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 9337e2fe402a03e_1	fill in the blank 9337e2fe402a03e_2	fill in the blank 9337e2fe402a03e_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank 9337e2fe402a03e_8	fill in the blank 9337e2fe402a03e_9	fill in the blank 9337e2fe402a03e_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank 9337e2fe402a03e_15	fill in the blank 9337e2fe402a03e_16	fill in the blank 9337e2fe402a03e_17