Palmgren Company produces consumer products. The sales budget for four months of the year is presented below. Unit Sales Dollar Sales July 30,000 $985,000 August 34,000 1,062,800 September 38,000 1,200,000 October 37,000 1,142,100 Company policy requires that ending inventories for each month be 25 percent of next month's sales. At the begini July, the beginning inventory of consumer products met that policy. Required: Prepare a production budget for the third quarter of the year. Show the number of units that should be produced month as well as for the quarter in total. Palmgren Company Production Budget For the Third Quarter July August September Total Unit sales 30,000 V 34,000 V 38,000 102,000 Desired ending inventory 8,500 9,500 9,250 27,250 X Total needed 38,500 43,500 47,250 129,250 X Less: Beginning inventory 7,500 8,500 9,500 25,500 X
Palmgren Company produces consumer products. The sales budget for four months of the year is presented below. Unit Sales Dollar Sales July 30,000 $985,000 August 34,000 1,062,800 September 38,000 1,200,000 October 37,000 1,142,100 Company policy requires that ending inventories for each month be 25 percent of next month's sales. At the begini July, the beginning inventory of consumer products met that policy. Required: Prepare a production budget for the third quarter of the year. Show the number of units that should be produced month as well as for the quarter in total. Palmgren Company Production Budget For the Third Quarter July August September Total Unit sales 30,000 V 34,000 V 38,000 102,000 Desired ending inventory 8,500 9,500 9,250 27,250 X Total needed 38,500 43,500 47,250 129,250 X Less: Beginning inventory 7,500 8,500 9,500 25,500 X
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Production Budget
Palmgren Company produces consumer products. The sales budget for four months of the year is presented below.
Unit Sales
Dollar Sales
July
30,000
$985,000
August
34,000
1,062,800
September
38,000
1,200,000
October
37,000
1,142,100
Company policy requires that ending inventories for each month be 25 percent of next month's sales. At the beginr
July, the beginning inventory of consumer products met that policy.
Required:
Prepare a production budget for the third quarter of the year. Show the number of units that should be produced e
month as well as for the quarter in total.
Palmgren Company
Production Budget
For the Third Quarter
July
August
September
Total
Unit sales
30,000 V
34,000 V
38,000 V
102,000
Desired ending inventory
8,500
9,500 V
9,250 V
27,250 X
Total needed
38,500
43,500
47,250 V
129,250 X
Less: Beginning inventory
7,500 V
8,500 V
9,500 V
25,500 X
Transcribed Image Text:Required:
Prepare a production budget for the third quarter of the year. Show the number of units that shouk be prode
month as well as for the quarter in total.
Palmgren Company
Production Budget
For the Third Quarter
July
August
September
Total
Unit sales
30,000 V
34,000
38,000 V
102,000 V
Desired ending inventory
8,500 V
9,500 V
9,250 V
27,250 X
Total needed
38,500 V
43,500 V
47,250 V
129,250 X
Less: Beginning inventory
7,500
8,500
9,500 V
25,500 X
Units produced
31,000 V
35,000 V
37,750 V
103,750
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