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	14,500	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.

	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Custom:
Units	fill in the blank d79b6601304e06e_1	fill in the blank d79b6601304e06e_2	fill in the blank d79b6601304e06e_3	fill in the blank d79b6601304e06e_4	fill in the blank d79b6601304e06e_5
Unit price	$fill in the blank d79b6601304e06e_6	$fill in the blank d79b6601304e06e_7	$fill in the blank d79b6601304e06e_8	$fill in the blank d79b6601304e06e_9	$fill in the blank d79b6601304e06e_10
Sales	$fill in the blank d79b6601304e06e_11	$fill in the blank d79b6601304e06e_12	$fill in the blank d79b6601304e06e_13	$fill in the blank d79b6601304e06e_14	$fill in the blank d79b6601304e06e_15
Basic:
Units	fill in the blank d79b6601304e06e_16	fill in the blank d79b6601304e06e_17	fill in the blank d79b6601304e06e_18	fill in the blank d79b6601304e06e_19	fill in the blank d79b6601304e06e_20
Unit price	$fill in the blank d79b6601304e06e_21	$fill in the blank d79b6601304e06e_22	$fill in the blank d79b6601304e06e_23	$fill in the blank d79b6601304e06e_24	$fill in the blank d79b6601304e06e_25
Sales	$fill in the blank d79b6601304e06e_26	$fill in the blank d79b6601304e06e_27	$fill in the blank d79b6601304e06e_28	$fill in the blank d79b6601304e06e_29	$fill in the blank d79b6601304e06e_30
Total Sales	$fill in the blank d79b6601304e06e_31	$fill in the blank d79b6601304e06e_32	$fill in the blank d79b6601304e06e_33	$fill in the blank d79b6601304e06e_34	$fill in the blank d79b6601304e06e_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:

	Quarter 1	Quarter 2	Quarter 3
Unit sales	fill in the blank 345972010064fc4_1	fill in the blank 345972010064fc4_2	fill in the blank 345972010064fc4_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank 345972010064fc4_8	fill in the blank 345972010064fc4_9	fill in the blank 345972010064fc4_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank 345972010064fc4_15	fill in the blank 345972010064fc4_16	fill in the blank 345972010064fc4_17

Question Content Area

Production budget for basics:

	Quarter 1	Quarter 2	Quarter 3
Unit sales	fill in the blank aa3bcfff4f98fd2_1	fill in the blank aa3bcfff4f98fd2_2	fill in the blank aa3bcfff4f98fd2_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank aa3bcfff4f98fd2_8	fill in the blank aa3bcfff4f98fd2_9	fill in the blank aa3bcfff4f98fd2_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank aa3bcfff4f98fd2_15	fill in the blank aa3bcfff4f98fd2_16	fill in the blank aa3bcfff4f98fd2_17