Preparing a Production Budget Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales: January 41,000 February 38,000 March 50,000 April 51,000 Patrick's policy is to have 19% of next month's sales in ending inventory. On January 1, it is expected that there will be 4,350 drums of solvent on hand. Required: Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total. If required, round your answers to the nearest whole unit. Patrick Inc. Production Budget For the Coming Quarter January February March 1st Quarter Total Sales 41,000 V 38,000 v 50,000 V 129,000 V Desired ending inventory 7,220 V 9,500 V 9,690 V 26,410 x Total needs 48,220 V 47,500 v 59,690 V 155,410 x Less: Beginning inventory 4,350 V 7,220 V 9,500 V 21,070 x Units to be produced 43,870 V 40,280 V 50,190 V

Preparing a Production Budget Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales: January 41,000 February 38,000 March 50,000 April 51,000 Patrick's policy is to have 19% of next month's sales in ending inventory. On January 1, it is expected that there will be 4,350 drums of solvent on hand. Required: Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total. If required, round your answers to the nearest whole unit. Patrick Inc. Production Budget For the Coming Quarter January February March 1st Quarter Total Sales 41,000 V 38,000 v 50,000 V 129,000 V Desired ending inventory 7,220 V 9,500 V 9,690 V 26,410 x Total needs 48,220 V 47,500 v 59,690 V 155,410 x Less: Beginning inventory 4,350 V 7,220 V 9,500 V 21,070 x Units to be produced 43,870 V 40,280 V 50,190 V

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Vishnu
Preparing a Sales Budget Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first 3 months of the coming year: January 41,000 February 38,000 March 50,000 The average price for a drum is $37. Required: Prepare a sales budget for the first 3 months of the coming year, showing units and sales revenue by month and in total for the quarter. Do not include a multiplication symbol as part of your answer. Patrick Inc. Sales Budget For the Coming Quarter January February March 1st Quarter Total Units Price 2$ Sales
Dhapa
Silver Company makes a product with peak sales in May of each year. Its sales budget for the second quarter is given below: April May June Total Budgeted sales (all on account) $300,000 $500,000 $200,000 $1,000,000 The company estimates 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230, 000, and March sales totaled $260,000. Required: Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. What is the accounts receivable balance on June 30th?
How do I prepare the cash budget for the quarter ended March 31, 20X1?
Spacely Sprockets' sales budget shows the following expected total sales: Month January February March April Sales $31,700 $41,700 $36,700 $31,700 The company expects 80% of its sales to be on account (credit sales). Credit sales are collected as follows: 30% In the month of sale and 68% In the month following the sale, with the remainder being uncollectible and written off in the month following the sale. Required: a. Calculate budgeted accounts receivable at the end of each month from February through April. b. Calculate budgeted cash Inflows from collection of receivables for each month from February through April. Note: Round your Intermediate calculations and final answers to the nearest whole dollar amount. a. Budgeted accounts receivable Answer is not complete. b. Budgeted cash inflows from collection of receivables February March April S 17,752 S 23,352 $ 20,552
The marketing department of Jessi Corporation submitted the following sales forecast for next year (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 12,900 13,900 15,900 14,900 Budgeted unit sales The selling price of the company's product is $28 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made and 20% in the following quarter; 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $74,000. The company expects to start the first quarter with 2,580 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,780 units. Required: 1. alculate the estimated sales for each quarter and for the year as a whole. 2. Calculate the expected cash collections…
The marketing department of IKEA Inc. has submitted the following sales forecast for the upcoming fiscal year. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales 7,000 6,000 10,000 8,000 The company expects to start the first quarter with 1,500 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,100 units. Each unit requires 0.75 direct labor-hours, and direct laborers are paid $16.00 per labor hour. The variable portion of its predetermined manufacturing overhead rate is $ 4 per direct labor-hour and its total fixed manufacturing overhead is $35,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $8,000 per quarter. The company’s variable selling and administrative expense per unit is $7.50. Fixed selling and administrative expenses include…
Atlantic Surf manufactures surfboards. The company's budgeted sales units for the next three months is shown below. Company policy is to maintain finished goods Inventory equal (in units) to 40% of the next month's unit sales. As of June 30, the company has 1,600 finished surfboards In Inventory. Budgeted sales units July 4,000 August 5,500 September 4,200 Prepare the production budget for the months of July and August. ATLANTIC SURF Production Budget Desired ending inventory units Total required units Units to be produced July August
Fact Pattern: A company produces a product that requires 2 pounds of a raw material. It is forecast that there will be 6,000 pounds of raw material on hand at the end of June. At the end of any given month, the company wishes to have 30% of next month's raw material requirements on hand. The company has budgeted production of the product for July, August, September, and October to be 10,000, 12,000, 13,000, and 11,000 units, respectively. As of June 1, the raw material sells for $1.00 per pound. In the month of September, raw material purchases and ending inventory, respectively, will be (in pounds): OA. OB. O C. 24,800 and 6,600. 32,600 and 6,600. 24,800 and 3,900. OD. 13,000 and 3,900.