Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 15,000 units plus 10% of the next month's sales. The finished goods inventory on March 31 is budgeted to be 28,500 units. b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 98,800 components. c. The company maintains no work in process inventories. A sales budget for the All Weather speaker is as follows: April May June July August Budgeted Sales in Units 107,000 146,000 213,000 114,000 61,500 Required: 1. Prepare a production budget for the All Weather for April, May, June and July. Budgeted sales (units) Add: Desired ending inventory Total needs Less: Beginning inventory Required production April 107,000 29,600 136,600 28,500 108,100 May 146,000 36,300 182,300 29,600 152,700 June 213,000 26,400 239,400 36,300 203,100 July 114,000 21,150 135,150 26,400 108,750
Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has the following inventory requirements: a. The finished goods inventory on hand at the end of each month must be equal to 15,000 units plus 10% of the next month's sales. The finished goods inventory on March 31 is budgeted to be 28,500 units. b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 98,800 components. c. The company maintains no work in process inventories. A sales budget for the All Weather speaker is as follows: April May June July August Budgeted Sales in Units 107,000 146,000 213,000 114,000 61,500 Required: 1. Prepare a production budget for the All Weather for April, May, June and July. Budgeted sales (units) Add: Desired ending inventory Total needs Less: Beginning inventory Required production April 107,000 29,600 136,600 28,500 108,100 May 146,000 36,300 182,300 29,600 152,700 June 213,000 26,400 239,400 36,300 203,100 July 114,000 21,150 135,150 26,400 108,750
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Symphony Electronics produces wireless speakers for outdoor use on patios, decks, etc. Their most popular model is the All Weather
and requires four separate XL12 components per unit. The company is now planning raw material needs for the second quarter. Sales
of the All Weather are the highest in the second quarter of each year as customers prepare for the summer season. The company has
the following inventory requirements:
a. The finished goods inventory on hand at the end of each month must be equal to 15,000 units plus 10% of the next month's sales.
The finished goods inventory on March 31 is budgeted to be 28,500 units.
b. The raw materials inventory on hand at the end of each month must be equal to 20% of the following month's production needs for
raw materials. The raw materials inventory on March 31 for XL 12 is budgeted to be 98,800 components.
c. The company maintains no work in process inventories.
A sales budget for the All Weather speaker is as follows:
April
May
June
July
August
Budgeted Sales in Units
107,000
146,000
213,000
114,000
61,500
Required:
1. Prepare a production budget for the All Weather for April, May, June and July.
Budgeted sales (units)
Add: Desired ending inventory
Total needs
Less: Beginning inventory
Required production
April
107,000
29,600
136,600
28,500
108, 100
May
146,000
36,300
182,300
29,600
152,700
June
213,000
26,400
239,400
36,300
203,100
July
114,000
21,150
135,150
26,400
108,750
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