Your answer is partially correct. Try again Sheridan Company is preparing its master budget for 2020. Relevant data pertaining to its sales, production, and direct materials budgets are as follows Sales. Sales for the year are expected to total 1,100,000 units. Quarterly sales are 22%, 27%, 26%, and 25%, respectively. The sales price is expected to be $38 per unit for the first three quarters and $45 per unit beginning in the fourth quarter. Sales in the first quarter of 2021 are expected to be 15% higher than the budgeted sales for the first quarter of 2020. Production. Management desires to maintain the ending finished goods inventories at 25% of the next quarter's budgeted sales volume Direct materials. Each unit requires 2 pounds of raw materials at a cost of $10 per pound. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for first quarter of 2021 are 492,000 pounds Prepare the sales, production, and direct materials budgets by quarters for 2020. SHERIDAN COMPANY Sales Budget For the Year Ending December 31, 2020 Quarter 1 4 Year Expected Unit Sales 275000 297000 286000 242000 1100000 38 38 38 45 Unit Selling Price 12375000 11286000 9196000 10868000 43725000 Total Sales wwwwwwwwwww wwww ww SHERIDAN COMPANY Production Budget For the Year Ending December 31, 2020 Quarter Year 1 2. 4 242000 297000 286000 275000 Expected Unit Sales 71500 Add 74250 68750 69575 Desired Ending Finished Goods Units X 368500 316250 354750 344575 Total Required Units 71500 Less 60500 74250 68750 Beginning Finished Goods Units 1400575 255750 442750 426250 275825 Required Production Units www. w wmm wwm SHERIDAN COMPANY Direct Materials Budget For the Year Ending December 31, 2020 Quarter 1 2 3 4 Year 426250 275825 255750 442750 Units to be Produced Direct Materials Per Unit ... R 852500 885500 Total Pounds Required for Production 511500 551650 X 59350 58150 55165 Add Desired Ending Direct Materials (Pounds) 49200 570850 651650 636665 600850 Total Materials Required 59350 58150 Less 55165 Beginning Direct Materials (Pounds) SHERIDAN COMPANY Direct Materials Budget For the Year Ending December 31, 2020 Quarter 1 2 3 4 Year 442750 426250 255750 275825 Units to be Produced 2 2 Direct Materials Per Unit 852500 511500 885500 551650 Total Pounds Required for Production 59350 58150 Add Desired Ending Direct Materials (Pounds) 55165 49200 570850 651650 636665 600850 Total Materials Required 59350 58150 Less 55165 Beginning Direct Materials (Pounds) 711000 694815 656015 Total Cost of Direct Materials Purchases 10 10 10 10 Cost Per Pound * 6560150 7110000 6948150 Total Cost of Direct Materials Purchases Click if you would like to Show Work for this question: Open Show Work
