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	88,600
Third quarter	16,800	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:

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 e30e5b010f95fd1_1	fill in the blank e30e5b010f95fd1_2	fill in the blank e30e5b010f95fd1_3	fill in the blank e30e5b010f95fd1_4	fill in the blank e30e5b010f95fd1_5
Unit price	$fill in the blank e30e5b010f95fd1_6	$fill in the blank e30e5b010f95fd1_7	$fill in the blank e30e5b010f95fd1_8	$fill in the blank e30e5b010f95fd1_9	$fill in the blank e30e5b010f95fd1_10
Sales	$fill in the blank e30e5b010f95fd1_11	$fill in the blank e30e5b010f95fd1_12	$fill in the blank e30e5b010f95fd1_13	$fill in the blank e30e5b010f95fd1_14	$fill in the blank e30e5b010f95fd1_15
Basic:
Units	fill in the blank e30e5b010f95fd1_16	fill in the blank e30e5b010f95fd1_17	fill in the blank e30e5b010f95fd1_18	fill in the blank e30e5b010f95fd1_19	fill in the blank e30e5b010f95fd1_20
Unit price	$fill in the blank e30e5b010f95fd1_21	$fill in the blank e30e5b010f95fd1_22	$fill in the blank e30e5b010f95fd1_23	$fill in the blank e30e5b010f95fd1_24	$fill in the blank e30e5b010f95fd1_25
Sales	$fill in the blank e30e5b010f95fd1_26	$fill in the blank e30e5b010f95fd1_27	$fill in the blank e30e5b010f95fd1_28	$fill in the blank e30e5b010f95fd1_29	$fill in the blank e30e5b010f95fd1_30
Total Sales	$fill in the blank e30e5b010f95fd1_31	$fill in the blank e30e5b010f95fd1_32	$fill in the blank e30e5b010f95fd1_33	$fill in the blank e30e5b010f95fd1_34	$fill in the blank e30e5b010f95fd1_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 cde28902f010fc2_1	fill in the blank cde28902f010fc2_2	fill in the blank cde28902f010fc2_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank cde28902f010fc2_8	fill in the blank cde28902f010fc2_9	fill in the blank cde28902f010fc2_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced	fill in the blank cde28902f010fc2_15	fill in the blank cde28902f010fc2_16	fill in the blank cde28902f010fc2_17

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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 6136ae01d014042_1	fill in the blank 6136ae01d014042_2	fill in the blank 6136ae01d014042_3
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Total needed	fill in the blank 6136ae01d014042_8	fill in the blank 6136ae01d014042_9	fill in the blank 6136ae01d014042_10
Desired ending inventoryLess: Beginning inventoryUnits producedUnit sales	- Select -	- Select -	- Select -
Units produced