Percy’s Pickled Snacks produces several types of pickled vegetables. The company

Question

Percy’s Pickled Snacks produces several types of pickled vegetables. The company budgets for each quarter in the last month of the previous quarter. In early March, Percy is preparing the budget for pickled beets. Budgeted sales are 12,000 jars for April, 16,000 jars for May, and 19,000 jars for June. Each jar requires 1.2 pounds of beets. The pickling process takes 60 minutes for 20 jars. Because pressurized cooking is used, the processing is monitored by an employee at all times. Each jar of pickled beets sells for $15.00.

Percy requires ending Finished Goods inventory equal to 25% of the following month’s sales. Other information is as follows:

Standard direct labor rate $12.00

Variable overhead rate $45 per direct labor hour

Price of beets $6 per pound

Price of jars, 100-lot $150

What is Percy’s production budget for April?

Explanation / Answer

Budgeted sales for April 12000 Add: Desired ending inventory 4000 =16000*25% Total needs 16000 Less: Beginning inventory 3000 =12000*25% Production budget for April 13000

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