Tina's Fine Juices is a bottle of orange juice located in the Northeast. The company produces bottled orange juice from fruit concentrate purchased from suppliers in Florida, Arizona, and California. The only ingredients in the juice are water and concentrate. The juice is blended, pasteurized, and bottled for sale in 12-ounce plastic bottles. The process is heavily automated and is centered on five machines that control the mixing and bottling of the juice. The amount of labor required is very small per bottle of juice. The average worker can process 10 bottles of juice per minute, or 600 bottles per hour. The juice is sold by a number of grocery stores under their store brand name and in smaller restaurants, delis, and bagel shops under the name of Tina's Fine Juices. Tina's has been in business for several years and uses a sophisticated sales forecasting model based on previous sales, expected changes in demand, and economic factors affecting the industry. Sales of juice are highly seasonal, peaking in the first quarter of the calendar year.												600
Forecasted sales for the last two months of 2017 and all of 2018 are shown in the table below, and on the next worksheet. Other information about the company follows:
1	Juice is sold for $1.10 per 12-ounce bottle, in cartons that hold 50 bottles each.						$1.10
2	Tina's Fine Juices tries to maintain at least 12 percent of the next month's estimated sales in inventory at the end of each month.									12%
3	The company needs to prepare two purchases budgets: one for the concentrate used in its orange juice and one for the bottles that are purchased from an outside supplier. Tina's has determined that it takes 1 gallon of orange concentrate for every 32 bottles of finished product. Each gallon of concentrate costs $4.50. Tina's also requires 18 percent of next month's direct material needs to be on hand at the end of the budget period. Bottles can be purchased from an outside supplier for $0.15 each.										$4.50	18%	$0.15
4	Factory workers are paid an average of $18 per hour, including fringe benefits and payroll taxes. If the production schedule doesn't allow for full utilization of the workers and machines, one or more workers are temporarily moved to another department.										$18.00
5	Most of the production process is automated, the juice is mixed by machine, and machines do the bottling and packaging. Overhead costs are incurred almost entirely in the mixing and bottling process. Consequently, Tina's has chosen to use a plantwide cost driver (machine hours) to apply manufacturing overhead to products.
6	Variable overhead costs will be in direct proportion to the number of bottles of juice produced, but fixed overhead costs will remain constant, regardless of production. For budgeting purposes, Tina's separates variable overhead from fixed overhead and calculates a predetermined overhead rate for variable manufacturing overhead costs.
7	Tina's uses a predetermined rate for variable overhead of $55 per machine hour. Use this to calculate variable overhead.										$55.00
8	Tina's has also estimated fixed overhead to be $123,000 per month of which $103,000 per month is depreciation on existing property, plant, and equipment.										$123,000.00	$103,000.00
9	All of the company's sales are on credit. On the basis of the company's experience in previous years, the company estimates that 40 percent of the sales each month will be paid for in the month of sale. The company also estimates that 50 percent of the month's sales will be collected in the month following sale and that 10 percent of each month's sales will be collected in the second month following sale.										40%	50%	10%
10	Tina's has a policy of paying 80 percent of the direct material purchases in the month of purchase and the 20 percent balance in the month after purchase. Overhead costs are also paid 80 percent in the month they are incurred and 20 percent in the next month.										80%	20%
11	Selling and administrative expenses are $100,000 per month and are paid in cash as they are incurred.										$100,000.00
	Sales 2017			Sales 2018
	November	375,000		January	350,000
	December	370,000		February	425,000
				March	400,000
				April	395,000
				May	375,000
				June	350,000
				July	375,000
				August	385,000
				September	395,000
				October	405,000
				November	400,000
				December	365,000

Complete the gray boxes.									Sales 2017
									November	375,000
Prepare a Sales Budget for the first quarter of 2018.									December	370,000
			Sales Budget						Sales 2018
			January	February	March	1st Quarter			January	350,000
Projected sales (bottles)									February	425,000
x price per unit									March	400,000