Wildhorse Company is preparing its master budget for 2022. Relevant data pertaining to its sales, production, and direct materials budgets are as follows.

Sales. Sales for the year are expected to total 1,300,000 units. Quarterly sales are 20%, 25%, 25%, and 30%, respectively. The sales price is expected to be $40 per unit for the first three quarters and $45 per unit beginning in the fourth quarter. Sales in the first quarter of 2023 are expected to be 20% higher than the budgeted sales for the first quarter of 2022.

Production. Management desires to maintain the ending finished goods inventories at 25% of the next quarters budgeted sales volume.

Direct materials. Each unit requires 2 pounds of raw materials at a cost of $12 per pound. Management desires to maintain raw materials inventories at 10% of the next quarters production requirements. Assume the production requirements for first quarter of 2023 are 585,000 pounds.

(a)

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Prepare the sales budgets by quarters for 2022.

WILDHORSE COMPANY Sales Budget choose the accounting period For the Quarter Ending December 31, 2022December 31, 2022For the Year Ending December 31, 2022
	Quarter
	1	2	3	4	Year
select a sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price	enter a number of units	enter a number of units	enter a number of units	enter a number of units	enter a number of units
select a sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price	$enter a dollar amount	$enter a dollar amount	$enter a dollar amount	$enter a dollar amount
select a closing sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price	$enter a total amount	$enter a total amount	$enter a total amount	$enter a total amount	$enter a total amount

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Solution

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(b)

Prepare the production budgets by quarters for 2022.

WILDHORSE COMPANY Production Budget choose the accounting period For the Year Ending December 31, 2022For the Quarter Ending December 31, 2022December 31, 2022
	Quarter
	1		2		3		4		Year
select an opening production budget item Expected Unit SalesTotal Materials RequiredDirect Materials Per UnitDesired Ending Direct Materials (Pounds)Direct Materials PurchasesBeginning Direct Materials (Pounds)Beginning Finished Goods UnitsDesired Ending Finished Goods UnitsTotal Required UnitsRequired Production Units	enter a number of units		enter a number of units		enter a number of units		enter a number of units
select between addition and deduction LessAdd: select a production budget item Beginning Finished Goods UnitsDesired Ending Direct Materials (Pounds)Total Required UnitsRequired Production UnitsTotal Materials RequiredBeginning Direct Materials (Pounds)Direct Materials PurchasesExpected Unit SalesDirect Materials Per UnitDesired Ending Finished Goods Units	enter a number of units		enter a number of units		enter a number of units		enter a number of units
select a summarizing line for the first part Total Required UnitsDirect Materials PurchasesTotal Materials RequiredDesired Ending Direct Materials (Pounds)Direct Materials Per UnitDesired Ending Finished Goods UnitsExpected Unit SalesBeginning Finished Goods UnitsBeginning Direct Materials (Pounds)Required Production Units	enter a total number of units for the first part		enter a total number of units for the first part		enter a total number of units for the first part		enter a total number of units for the first part
select between addition and deduction AddLess: select a production budget item Desired Ending Direct Materials (Pounds)Expected Unit SalesDirect Materials Per UnitTotal Materials RequiredRequired Production UnitsTotal Required UnitsDirect Materials PurchasesBeginning Finished Goods UnitsBeginning Direct Materials (Pounds)Desired Ending Finished Goods Units	enter a number of units		enter a number of units		enter a number of units		enter a number of units
select a closing production budget item Desired Ending Finished Goods UnitsDirect Materials Per UnitTotal Materials RequiredDesired Ending Direct Materials (Pounds)Beginning Finished Goods UnitsTotal Required UnitsRequired Production UnitsExpected Unit SalesDirect Materials PurchasesBeginning Direct Materials (Pounds)	enter a number of units		enter a total number of units		enter a total number of units		enter a total number of units		enter a total number of units