Chapter 8, Problem 2CE

Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next month’s unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls.

Required:

1. 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year.
2. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget?

FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKick’s best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following:

Required:

1. 1. Construct a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter.
2. 2. What if FlashKick added a third line—tournament quality soccer balls that were expected to take 40 percent of the units sold of the match balls and would have a selling price of $45 each in January and February, and $48 each in March? Prepare a sales budget for Flash- Kick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter.