I do not understand the desired ending inventory in exercise 11. I cannot figure the calculations to get that number. **Sales Budget Analysis**In 20Y5, Cards by Shannon generated the sales shown below. The company expects sales to increase by 2% for each product in the following year if the prices remain the same. Determine the budgeted revenue for 20Y6.**Cards by Shannon Sales Budget***For the Year Ended December 31, 20Y6*| Product | Units Sold (20Y5) | Unit Sales (20Y6) | Selling Price per Unit | Budgeted Revenue ||-----------|-------------------|-------------------|------------------------|-------------------|| Product A | 2,000 | 2,040 | $10 | $20,400 || Product B | 5,000 | 5,100 | $12 | $61,200 || Product C | 1,500 | 1,530 | $8 | $12,240 || **Total** | | | | **$93,840** |**Explanation:** - **Units Sold (20Y5):** This column shows the number of units sold for each product in the year 20Y5.- **Unit Sales (20Y6):** Here, a 2% increase in sales from 20Y5 is applied for each product.- **Selling Price per Unit:** The price at which each unit was sold, assumed to remain unchanged in 20Y6.- **Budgeted Revenue:** Calculated by multiplying the Unit Sales for 20Y6 by the Selling Price per Unit. The total budgeted revenue for 20Y6 is $93,840. ### Production Planning for Cards by Shannon**Overview:**The production department at Cards by Shannon ensures enough finished goods are available to cover each year’s sales, plus 5% of the following year’s sales. This approach was used in both 20Y5 and 20Y6. The task is to calculate the total units to be produced in 20Y6 and estimate the 20Y7 production needs, assuming a 10% sales increase in 20Y7.**Unit Sales Overview:**- **20Y5:** - Product A: 2,000 units - Product B: 5,000 units - Product C: 1,500 units- **20Y6:** - Product A: 2,040 units - Product B: 5,100 units - Product C: 1,530 units- **20Y7 (Projected):** - Product A: 2,244 units - Product B: 5,610 units - Product C: 1,683 units**Production Budget for 20Y6:**- **Product A:** - Expected units to be sold: 2,040 - Plus desired ending inventory (5% of 20Y7 sales): 112 - Total units required: 2,152 - Less beginning inventory: 102 - Total units to be produced: 2,050- **Product B:** - Expected units to be sold: 5,100 - Plus desired ending inventory (5% of 20Y7 sales): 281 - Total units required: 5,381 - Less beginning inventory: 255 - Total units to be produced: 5,126- **Product C:** - Expected units to be sold: 1,530 - Plus desired ending inventory (5% of 20Y7 sales): 84 - Total units required: 1,614 - Less beginning inventory: 77 - Total units to be produced: 1,537The production budget for each product includes the expected sales, a desired inventory buffer for the following year, and adjustments for beginning inventory, ensuring the company fulfills both current and future demands efficiently.

11. Cards by Shannon's production department (information in Exercise 10) produces enough finished goods to cover each year's sales, plus 5% of the upcoming year's sales. If the company followed these production guidelines in 20Y5 and 20Y6, determine the total units to be produced in 20Y6. The company expects unit sales to increase by 10% in 20Y7. Round answers to the nearest whole unit. Units Sales (20Y5) Unit Sales (20Y6) Unit Sales (20Y7) Product A 2,000 2,040 2,244 Product B 5,000 5,100 5,610 Product C 1,500 1,530 1,683 Cards by Shannon Production Budget For the Year Ended December 31, 20Y6 Product A Product B Product C Expected units to be sold Plus desired ending inventory 2,040 5,100 1,530 112 281 84 Total units required 2,152 5,381 1,614 Less beginning inventory 102 255 77 Total units to be produced 2,050 5,126 1,537

11. Cards by Shannon's production department (information in Exercise 10) produces enough finished goods to cover each year's sales, plus 5% of the upcoming year's sales. If the company followed these production guidelines in 20Y5 and 20Y6, determine the total units to be produced in 20Y6. The company expects unit sales to increase by 10% in 20Y7. Round answers to the nearest whole unit. Units Sales (20Y5) Unit Sales (20Y6) Unit Sales (20Y7) Product A 2,000 2,040 2,244 Product B 5,000 5,100 5,610 Product C 1,500 1,530 1,683 Cards by Shannon Production Budget For the Year Ended December 31, 20Y6 Product A Product B Product C Expected units to be sold Plus desired ending inventory 2,040 5,100 1,530 112 281 84 Total units required 2,152 5,381 1,614 Less beginning inventory 102 255 77 Total units to be produced 2,050 5,126 1,537

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Do not give image format
A ______ quality of conformance means that a high percentage of units are defective.
Which of the following methods of cost estimation relies on only two data points?A. the high-low methodB. account analysisC. least-squares regressionD. SWOT analysis.
When using the general methods to estimate cost behavior, A. It is a good idea to use multiple methods so results can be compared B. Managers often apply their own best judgement as a first step in the estimation process C. Results are likely to differ from method to method D. Large differences in methods suggest that the cost cannot be estimated.
“In decision making, full (absorption) costing approach has become entirely useless as it leads to wrong decisions”. Provide examples and evaluate the statement.