Myler Company manufactures and sells a product that has seasonal variations in demand, with peak sales coming the third quarter. The following information concerns operations for Year 2 the coming year and for the first quarter of year 3. 10 a. The company’s single product sells for $ 8 per unit. Budgeted sales in units for the next six quarters are as follows: Year 2 quarter Year 3 quarter 1 2 3 4 1 2 Budgeted sales 40,000 60,000 1, 00,000 50,000 70,000 80,000 b. The company desires an ending inventory of finished units on hand at the end of each quarter equal to 30% of the budgeted sales for the next quarter. On December 31, year 1, the company had 12,000 units on hand. c. Five pounds of raw materials are required to complete one unit of product. The company requires an ending inventory of raw materials on hand at the end of each quarter equal to 10% of the production needs of the following quarter. On December31, year 1 the company had 23000 pounds of raw material on hand. d. The raw material costs of $0.80 per pound. Required: Prepare the following budgets and schedule for the year, showing both quarterly and total figure. 1. A sales budget and Production budget
1. Myler Company manufactures and sells a product that has seasonal variations in demand, with peak
sales coming the third quarter. The following information concerns operations for Year 2 the coming year
and for the first quarter of year 3. 10
a. The company’s single product sells for $ 8 per unit. Budgeted sales in units for the next six quarters are
as follows:
Year 2 quarter Year 3 quarter
1 2 3 4 1 2
Budgeted sales 40,000 60,000 1, 00,000 50,000 70,000 80,000
b. The company desires an ending inventory of finished units on hand at the end of each quarter equal to
30% of the budgeted sales for the next quarter. On December 31, year 1, the company had 12,000 units on
hand.
c. Five pounds of raw materials are required to complete one unit of product. The company requires an
ending inventory of raw materials on hand at the end of each quarter equal to 10% of the production needs
of the following quarter. On December31, year 1 the company had 23000 pounds of raw material on hand.
d. The raw material costs of $0.80 per pound.
Required:
Prepare the following budgets and schedule for the year, showing both quarterly and total figure.
1. A sales budget and Production budget
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