Prepare quarterly production budgets Turney Company produces and sells a product
ID: 2516085 • Letter: P
Question
Prepare quarterly production budgets Turney Company produces and sells a product called BIG The 2018 sales forecast is as follows. Quarter BIG 1 15000 2 16000 3 21000 4 25000 The January 1, 2017, inventory of BIG is 5,000 units. Management desires an ending inventory each quarter equal to 40% of the next quarter's sales. Sales in the first quarter of 2019 are expected to be 25% higher than sales in the same quarter in 2018. Instructions Prepare quarterly production budgets for each quarter and in total for 2018. Prepare quarterly production budgets Turney Company produces and sells a product called BIG The 2018 sales forecast is as follows. Quarter BIG 1 15000 2 16000 3 21000 4 25000 The January 1, 2017, inventory of BIG is 5,000 units. Management desires an ending inventory each quarter equal to 40% of the next quarter's sales. Sales in the first quarter of 2019 are expected to be 25% higher than sales in the same quarter in 2018. Instructions Prepare quarterly production budgets for each quarter and in total for 2018.Explanation / Answer
Production Budget For the Year Ending December 31, 2018 1 2 3 4 Year Expected Unit Sales 15000 16000 21000 25000 Add: Desired Ending Finished Goods Unit 6400 8400 10000 7500 Total Required Units 21400 24400 31000 32500 Less: Beginning FinishedGoods Unit 5000 6400 8400 10000 Required Production Units 16400 18000 22600 22500 79500