**Brief Exercise 9-22: Preparing a Production Budget**Patrick Inc. makes industrial solvents. In the first four months of the coming year, Patrick expects the following unit sales:- January: 41,000- February: 38,000- March: 50,000- April: 51,000Patrick’s policy is to have 25% of the next month’s sales in ending inventory. On January 1, it is expected that there will be 6,700 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.

Solution:- Production budget that determines the quantity of the firm's product that required to be produced during a budgetary time period. The following formula used Production budget = Budgeted sales units + Desired ending inventory - Beginning inventoryPreparation of production budget for first quarter as follows:- Particulars January February March 1st Quarter Total Sales 41,000 38,000 50,000 129,000 Desired ending Inventory 9,500 [38000 x 25%] 12,500 [50000 x 25%] 12,750 [51000 x 25%] 12,750 Total needs 50,500 50,500 62,750 141,750 Less:- Beginning Inventory 6,700 9,500 12,500 6,700 Units to be produced 43,800 41,000 50,250 135,050 If you are satisfied.. Support me .. Thank you...

Answered: Required: Prepare a production budget…

Business

Accounting

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.

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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