Turney Company produces and sells automobile batteries, the heavy-duty HD-240. T

Question

Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follows. Quarter HD-240 5,300 7,490 8,470 10,290 The January 1 2017, inventory of D 240 s2,120units Managemen quarter of 2018 are expected to be 25% higher than sales in the same quarter in 2017. t desires an ending inventory each quarter equal to 40% of the next quarter's sales, sales in the frst Prepare quarterly production budgets for each quarter and in total for 2017 TURNEY COMPANY Production Budget ember Product HD-240 Quarter Year Expected Unit Sales 3388 4116 Add 3 Desired Ending Finished Goods Unit B 10878 12586 8296 Total Required Units

Explanation / Answer

ANS

1) TURKEY COMPANY

PRODUCTION BUDGET

FOR THE YEAR ENDING DECEMBER 31, 2017

PRODUCT HD-240

QUARTER

2018 EXPECTED SALES QUARTER 1 = 5300 + 25% OF 5300 = 6625

6625 * 40% = 2650

2) DEWITT INDUSTRIES

DIRECT MATERIAL PURCHASE BUDGET

FOR THE QUARTER ENDING MARCH 31, 2017

LESS BEGINNING DIRECT MATERIALS

TOTAL COST OF DIRECT MATERIAL $80550 $ 70272 $46908 PURCHASES

1 2 3 4 YEAR EXPECTED UNIT SALES 5300 7490 8470 10290 ADD DESIRED ENDING FINISHED GOODS UNIT 2996 3388 4116 2650 TOTAL REQUIRED UNITS 8296 10878 12586 12940 LESS BEGINNING FINISHED GOODS UNIT 2120 2996 3388 4116 REQUIRED PRODUCTION UNITS 6176 7882 9198 8834 32090

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