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.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 16E
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Question
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa907521b-334f-488b-9fe6-17d7888d90e1%2F659898db-9f31-4816-8402-87f73068952c%2Faz95vzc_processed.png&w=3840&q=75)
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa907521b-334f-488b-9fe6-17d7888d90e1%2F659898db-9f31-4816-8402-87f73068952c%2Fnqsj52c_processed.png&w=3840&q=75)
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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