E9-19A (similar to) Question Help Hoffman Foods produces specialty soup sold in

Question

E9-19A (similar to) Question Help Hoffman Foods produces specialty soup sold in jars. The projected sales in dollars and jars for each quarter of the upcoming year are as follows: Hoffman anticipates selling 225,000 jars with total sales revenue of $261,000 in the first quarter of the year folowing the year given in the preceding table. Hoffman has a policy that the ending inventory of jars must be 30% of the following quarter's sales. Total sales revenue $184,000 $210,000 $255,000 $198,000 Number of jars sold 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. 1st quarter 2nd quarter 3rd quarter 4th quarter 154,000 185,000 210,000 162,000 Prepare the production budget by first calculating the total units needed, then caulate the units to produce Hoffman 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

Explanation / Answer

PRODUCTION BUDGET :

1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER YEAR Unit sales 154000 185000 210000 162000 711000 Plus:Desired ending inventory 55500 63000 48600 67500 67500 Total needed 209500 248000 258600 229500 778500 Less: Beginning inventory (46200) (55500) (63000) (48600) (46200) Unit to produce 163300 192500 195600 180900 732300

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