Pillows makes decorative throw pillows for home use. The company sells the pillows to home décor retailers for $ 11 per pillow. Each pillow requires 1.20 yards of fabric, which the company obtains at a cost of $ 6 per yard. The company would like to maintain an ending stock of fabric equal to 20% of the next month's production requirements. The company would also like to maintain an ending stock of finished pillows equal to 25% of the next month's sales. Sales (in units) are projected to be as follows for the first three months of the year: More info: January.........140,000 February........180,000 March...........190,000 Requirement 1. Prepare the sales budget, including a separate section that details the type of sales made. For this section, assume that 10% of the company's pillows are cash sales, and the remaining 90% are sold on credit terms. (Round your answers to the nearest whole number.) Pillows Sales Budget For the Quarter Ended March 31 January February March 1st Quarter Unit sales 140,000 180,000 190,000 510,000 Unit selling price $11 $11 $11 $11 Total sales revenue $1,540,000 $1,980,000 $2,090,000 $5,610,000 Cash sales $154,000 $198,000 $209,000 $561,000 Credit sales $1,386,000 $1,782,000 $1,881,000 $5,049,000 Total sales $1,540,000 $1,980,000 $2,090,000 $5,610,000 Requirement 2. Prepare the production budget. Assume that the company anticipates selling 210,000 units in April. (Round your answers to the nearest whole number.) Pillows.com Production Budget For the Quarter Ended March 31 January February March 1st Quarter Unit sales __________ _________ _________ _____________ Plus: Desired ending inventory __________ _________ _________ _____________ Total needed __________ _________ _________ _____________ Less: Beginning inventory __________ _________ _________ _____________ Units to produce __________ _________ _________ _____________

Pillows makes decorative throw pillows for home use. The company sells the pillows to home décor retailers for $ 11 per pillow. Each pillow requires 1.20 yards of fabric, which the company obtains at a cost of $ 6 per yard. The company would like to maintain an ending stock of fabric equal to 20% of the next month's production requirements. The company would also like to maintain an ending stock of finished pillows equal to 25% of the next month's sales. Sales (in units) are projected to be as follows for the first three months of the year: More info: January.........140,000 February........180,000 March...........190,000 Requirement 1. Prepare the sales budget, including a separate section that details the type of sales made. For this section, assume that 10% of the company's pillows are cash sales, and the remaining 90% are sold on credit terms. (Round your answers to the nearest whole number.) Pillows Sales Budget For the Quarter Ended March 31 January February March 1st Quarter Unit sales 140,000 180,000 190,000 510,000 Unit selling price $11 $11 $11 $11 Total sales revenue $1,540,000 $1,980,000 $2,090,000 $5,610,000 Cash sales $154,000 $198,000 $209,000 $561,000 Credit sales $1,386,000 $1,782,000 $1,881,000 $5,049,000 Total sales $1,540,000 $1,980,000 $2,090,000 $5,610,000 Requirement 2. Prepare the production budget. Assume that the company anticipates selling 210,000 units in April. (Round your answers to the nearest whole number.) Pillows.com Production Budget For the Quarter Ended March 31 January February March 1st Quarter Unit sales ______ _ _ ___ Plus: Desired ending inventory _ _ ___ Total needed _ _ ___ Less: Beginning inventory _ _ ___ Units to produce _ _ _________

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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More info:

January.........140,000

February........180,000

March...........190,000

Requirement 1. Prepare the sales budget, including a separate section that details the type of sales made. For this section, assume that 10% of the company's pillows are cash sales, and the remaining 90% are sold on credit terms. (Round your answers to the nearest whole number.)

Pillows

Sales Budget

For the Quarter Ended March 31

January February March 1st Quarter

Unit sales 140,000 180,000 190,000 510,000

Unit selling price $11 $11 $11 $11

Total sales revenue $1,540,000 $1,980,000 $2,090,000 $5,610,000

Cash sales $154,000 $198,000 $209,000 $561,000

Credit sales $1,386,000 $1,782,000 $1,881,000 $5,049,000

Total sales $1,540,000 $1,980,000 $2,090,000 $5,610,000

Requirement 2. Prepare the production budget. Assume that the company anticipates selling 210,000 units in April. (Round your answers to the nearest whole number.)

Pillows.com

Production Budget

For the Quarter Ended March 31

January February March 1st Quarter

Unit sales __________ _________ _________ _____________

Plus: Desired ending inventory __________ _________ _________ _____________

Total needed __________ _________ _________ _____________

Less: Beginning inventory __________ _________ _________ _____________

Units to produce __________ _________ _________ _____________

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