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2. Prepare a separate production budget for each product for each of the first three quarters of the year.

2. Prepare a separate production budget for each product for each of the first three quarters of the year.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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5.2

Sales and Production Budgets Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and the standard sells for $10. Projected sales of the two models for the coming four quarters are given below. Deluxe Standard First quarter 11,000 90,000 Second quarter 14,200 88,200 Third quarter 16,500 93,000 Fourth quarter 20,000 91,400 The president of the company believes that the projected sales are realistic and can be achieved by the company. In the factory, the production supervisor has received the projected sales figures and gathered information needed to compile production budgets. He found that 1,300 deluxes and 1,170 standards were in inventory on January 1. Company policy dictates that ending inventory should equal 20 percent of the next quarter's sales for deluxes and 10 percent of next quarter's sales for standards.
Transcribed Image Text:Sales and Production Budgets Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and the standard sells for $10. Projected sales of the two models for the coming four quarters are given below. Deluxe Standard First quarter 11,000 90,000 Second quarter 14,200 88,200 Third quarter 16,500 93,000 Fourth quarter 20,000 91,400 The president of the company believes that the projected sales are realistic and can be achieved by the company. In the factory, the production supervisor has received the projected sales figures and gathered information needed to compile production budgets. He found that 1,300 deluxes and 1,170 standards were in inventory on January 1. Company policy dictates that ending inventory should equal 20 percent of the next quarter's sales for deluxes and 10 percent of next quarter's sales for standards.
2. Prepare a separate production budget for each product for each of the first three quarters of the year. Production budget for deluxes: Berring Company Production Budget for Deluxes First Three Quarters of the Year Quarter 1 Quarter 2 Quarter 3 Unit sales Total needed Units produced Production budget for standards: Unit sales Berring Company Production Budget for Standards First Three Quarters of the Year Total needed Units produced Quarter 1 Quarter 2 Quarter 3
Transcribed Image Text:2. Prepare a separate production budget for each product for each of the first three quarters of the year. Production budget for deluxes: Berring Company Production Budget for Deluxes First Three Quarters of the Year Quarter 1 Quarter 2 Quarter 3 Unit sales Total needed Units produced Production budget for standards: Unit sales Berring Company Production Budget for Standards First Three Quarters of the Year Total needed Units produced Quarter 1 Quarter 2 Quarter 3
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