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	11,000	90,000
Second quarter	14,200	88,200
Third quarter	16,500	93,000
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:

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 bc1259ff5fac02b_1	fill in the blank bc1259ff5fac02b_2	fill in the blank bc1259ff5fac02b_3	fill in the blank bc1259ff5fac02b_4	fill in the blank bc1259ff5fac02b_5
Unit price	$fill in the blank bc1259ff5fac02b_6	$fill in the blank bc1259ff5fac02b_7	$fill in the blank bc1259ff5fac02b_8	$fill in the blank bc1259ff5fac02b_9	$fill in the blank bc1259ff5fac02b_10
Sales	$fill in the blank bc1259ff5fac02b_11	$fill in the blank bc1259ff5fac02b_12	$fill in the blank bc1259ff5fac02b_13	$fill in the blank bc1259ff5fac02b_14	$fill in the blank bc1259ff5fac02b_15
Basic:
Units	fill in the blank bc1259ff5fac02b_16	fill in the blank bc1259ff5fac02b_17	fill in the blank bc1259ff5fac02b_18	fill in the blank bc1259ff5fac02b_19	fill in the blank bc1259ff5fac02b_20
Unit price	$fill in the blank bc1259ff5fac02b_21	$fill in the blank bc1259ff5fac02b_22	$fill in the blank bc1259ff5fac02b_23	$fill in the blank bc1259ff5fac02b_24	$fill in the blank bc1259ff5fac02b_25
Sales	$fill in the blank bc1259ff5fac02b_26	$fill in the blank bc1259ff5fac02b_27	$fill in the blank bc1259ff5fac02b_28	$fill in the blank bc1259ff5fac02b_29	$fill in the blank bc1259ff5fac02b_30
Total Sales	$fill in the blank bc1259ff5fac02b_31	$fill in the blank bc1259ff5fac02b_32	$fill in the blank bc1259ff5fac02b_33	$fill in the blank bc1259ff5fac02b_34	$fill in the blank bc1259ff5fac02b_35

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 7d0a37046fef00e_1	fill in the blank 7d0a37046fef00e_2	fill in the blank 7d0a37046fef00e_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank 7d0a37046fef00e_8	fill in the blank 7d0a37046fef00e_9	fill in the blank 7d0a37046fef00e_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank 7d0a37046fef00e_15	fill in the blank 7d0a37046fef00e_16	fill in the blank 7d0a37046fef00e_17

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 f78eecf97f97fee_1	fill in the blank f78eecf97f97fee_2	fill in the blank f78eecf97f97fee_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank f78eecf97f97fee_8	fill in the blank f78eecf97f97fee_9	fill in the blank f78eecf97f97fee_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank f78eecf97f97fee_15	fill in the blank f78eecf97f97fee_16	fill in the blank f78eecf97f97fee_17