KylerKyler Foods produces specialty soup sold in jars. The projected sales in do
ID: 2403664 • Letter: K
Question
KylerKyler
Foods produces specialty soup sold in jars. The projected sales in dollars and jars for each quarter of the upcoming year are as? follows:
Total sales revenue
Number of jars sold
1st quarter. . . .
$185,000
154,500
2nd quarter. . .
$213,000
180,000
3rd quarter. . . .
$257,000
210,500
4th quarter. . . .
$199,000
161,000
KylerKyler
anticipates selling
226 comma 000226,000
jars with total sales revenue of
$ 265 comma 000$265,000
in the first quarter of the year following the year given in the preceding table.
KylerKyler
has a policy that the ending inventory of jars must be
3030?%
of the following? quarter's sales.
Requirement
Prepare a production budget for the year that shows the number of jars to be produced each quarter and for the year in total.
Prepare the production budget by first calculating the total units? needed, then calculate the units to produce.
Kyler Foods
Production Budget
For the Quarters in the Upcoming Year
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Year
Unit sales
Plus: Desired ending inventory
Total needed
Total sales revenue
Number of jars sold
1st quarter. . . .
$185,000
154,500
2nd quarter. . .
$213,000
180,000
3rd quarter. . . .
$257,000
210,500
4th quarter. . . .
$199,000
161,000
Explanation / Answer
Production Budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Unit sales 154500 180000 210500 161000 706000 Add: Desired ending inventory 54000 63150 48300 67800 233250 (30% of next quarte sale) (180000*30%) (210500*30%) (161000*30%) (226000*30%) Total needed 208500 243150 258800 228800 939250 Less: Beginning inventory 46350 54000 63150 48300 211800 (30% of current quarter sale) (154500*30%) (180000*30%) (210500*30%) (161000*30%) Unit to produce 162150 189150 195650 180500 727450
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