A. Required: Given the following information, prepare a quartley sales budget an
ID: 2449021 • Letter: A
Question
A. Required: Given the following information, prepare a quartley sales budget and production budget, in units.
Last year sales = 500,000 units. The organization is planning a 10 percent increase in sales for the year 2012. The company is a retail organization that sees higher sales due to the holidays in the 4th quarter. 40 percent of the sales occur in the 4th quarter and the remaining units are sold equally over the other three quarters.
The beginning inventory for the year amounts to 20,000 units. The estimated sales for the first quarter of 2013 amount to 115,000 units. The company requires an ending inventory of 20 percent of the next quarters sale.
please show all work
Explanation / Answer
Solution :
SALES BUDGET
Q1
Q2
Q3
Q4
TOTAL
SALES
110000
110000
110000
220000
550000
Q4 SALES (550000*40%)
220000
Q1/Q2/ Q3 SALES (550000-220000)/3
110000
Production Budget
Q1
Q2
Q3
Q4
sales
110000
110000
110000
220000
Add
ending inventory (20% of next quarter sales)
22000
22000
44000
23000
Less
Beg inventory
20000
22000
22000
44000
Production
112000
110000
132000
199000
SALES BUDGET
Q1
Q2
Q3
Q4
TOTAL
SALES
110000
110000
110000
220000
550000
Q4 SALES (550000*40%)
220000
Q1/Q2/ Q3 SALES (550000-220000)/3
110000
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