Question
Sales Budget For the Year Ended December 31, 2021 Quarter 1 2 3 4 Year Expected Unit Sales 4100 4600 4300 5000 18000 Unit Selling
| Sales Budget | |||||
| For the Year Ended December 31, 2021 | |||||
| Quarter | |||||
| 1 | 2 | 3 | 4 | Year | |
| Expected Unit Sales | 4100 | 4600 | 4300 | 5000 | 18000 |
| Unit Selling Price | $80 | $80 | $80 | $80 | $80 |
| Total Sales | $328,000 | $368,000 | $344,000 | $400,000 | $1,440,000 |
| Prodution Budget for the Year Ended December 31, 2021 | |||||
| Quarter | |||||
| 1 | 2 | 3 | 4 | ||
| Expected Unit Sales | 4100 | 4600 | 4300 | 5000 | |
| Add: Desired ending finished goods units | 1150 | 1075 | 1250 | 2500 | |
| Total Required units | 5250 | 5675 | 5550 | 7500 | |
| Less: Beginning finished goods units | 1000 | 1150 | 1075 | 1250 | |
| Required production units | 4250 | 4525 | 4475 | 6250 | 19500 |
| (desired ending 30% next quarter) | |||||
The desired finished inventory in any quarter is 25% of the projected sales of the next quarter.
The desired ending inventory of direct materials in any quarter is 10% of what is needed to produce the units in the next quarter.
Based on the information above, if projected sales for quarter 3 in increased by 400 units to 4700 units, what will be the Required production units in the second and third quarter?
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ANSWER As the company estimates an desired ending inventory of 25 of the next quarters sale And as t...
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Principles of Accounting
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
12th edition
978-1133603054, 113362698X, 9781285607047, 113360305X, 978-1133626985
