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First quarter Second quarter Third quarter Fourth quarter Deluxe Standard 11,000 90,000 14,200 88,200 16,500 93,000 20,000 91,400

First quarter Second quarter Third quarter Fourth quarter Deluxe Standard 11,000 90,000 14,200 88,200 16,500 93,000 20,000 91,400

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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5.1

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.
Required: 1. Prepare a sales budget for each quarter and for the year in total. Show sales by product and in total for each time period. Berring Company Sales Budget For the Year Ended December 31 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Deluxe: Units Unit price Sales Standard: Units Unit price Sales Total Sales 10000 0000000
Transcribed Image Text:Required: 1. Prepare a sales budget for each quarter and for the year in total. Show sales by product and in total for each time period. Berring Company Sales Budget For the Year Ended December 31 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Deluxe: Units Unit price Sales Standard: Units Unit price Sales Total Sales 10000 0000000
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