KylerKyler Foods produces specialty soup sold in jars The pr

KylerKyler

Foods produces specialty soup sold in jars. The projected sales in dollars and jars for each quarter of the upcoming year are as? follows:

Total sales revenue

Number of jars sold

1st quarter. . . .

$185,000

154,500

2nd quarter. . .

$213,000

180,000

3rd quarter. . . .

$257,000

210,500

4th quarter. . . .

$199,000

161,000

KylerKyler

anticipates selling

226 comma 000226,000

jars with total sales revenue of

$ 265 comma 000$265,000

in the first quarter of the year following the year given in the preceding table.

KylerKyler

has a policy that the ending inventory of jars must be

3030?%

of the following? quarter\'s sales.

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.

Prepare the production budget by first calculating the total units? needed, then calculate the units to produce.

Kyler 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

	Total sales revenue	Number of jars sold
1st quarter. . . .		$185,000	154,500
2nd quarter. . .		$213,000	180,000
3rd quarter. . . .		$257,000	210,500
4th quarter. . . .		$199,000	161,000

Solution

Production Budget Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Unit sales 154500 180000 210500 161000 706000 Add: Desired ending inventory 54000 63150 48300 67800 233250 (30% of next quarte sale) (180000*30%) (210500*30%) (161000*30%) (226000*30%) Total needed 208500 243150 258800 228800 939250 Less: Beginning inventory 46350 54000 63150 48300 211800 (30% of current quarter sale) (154500*30%) (180000*30%) (210500*30%) (161000*30%) Unit to produce 162150 189150 195650 180500 727450