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Sparks Corp. manufactures knee braces and other orthopedic supplies. Knee braces sell for $175 each. Sparks Corp. projects sales for April will be 680 braces, with sales increasing by 85 braces per month for May, June and July. At the beginning of April Sparks Corp. has 135 braces on hand but desires to maintain an ending inventory of 10% of the next month's sales. Prepare the sales budget and production budget for Sparks Corp. for the months of April, May and June.

Sparks Corp. manufactures knee braces and other orthopedic supplies. Knee braces sell for $175 each. Sparks Corp. projects sales for April will be 680 braces, with sales increasing by 85 braces per month for May, June and July. At the beginning of April Sparks Corp. has 135 braces on hand but desires to maintain an ending inventory of 10% of the next month's sales. Prepare the sales budget and production budget for Sparks Corp. for the months of April, May and June.

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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Sparks Corp. manufactures knee braces and other orthopedic supplies. Knee braces sell for $175 each. Sparks Corp. projects sales for April will be 680 braces, with sales increasing by 85 braces per month for May, June and July. At the beginning of April Sparks Corp. has 135 braces on hand but desires to maintain an ending inventory of 10% of the next month's sales.

Prepare the sales budget and production budget for Sparks Corp. for the months of April, May and June.

 

Sparks Corp. Production Budget For the Three Months Ended June 30 May Budgeted sets to be sold Plus: Desired units in ending inventory Total units needed Less: Units in beginning inventory Budgeted units to be produced April 680✔ 77 X 757 X 135✓ 622 X 765✓ 85✔ 850 ✓ 77 X 774 X June 850 ✓ 94 X 944 X 85✔ 859 X Total 2,295✔ 94 X 2,389 X 135✔ 2,254 X
Transcribed Image Text:Sparks Corp. Production Budget For the Three Months Ended June 30 May Budgeted sets to be sold Plus: Desired units in ending inventory Total units needed Less: Units in beginning inventory Budgeted units to be produced April 680✔ 77 X 757 X 135✓ 622 X 765✓ 85✔ 850 ✓ 77 X 774 X June 850 ✓ 94 X 944 X 85✔ 859 X Total 2,295✔ 94 X 2,389 X 135✔ 2,254 X
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