Production Budget Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers) for the coming five quarters are as follows: S12L7 S12L5 First quarter, 20Y1 1,120 1,820 Second quarter, 20Y1 3,080 1,960 Third quarter, 20Y1 7,840 7,420 Fourth quarter, 20Y1 6,440 5,460 First quarter, 20Y2 1,260 1,680 The vice president of sales believes that the projected sales are realistic and can be achieved by the company. Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Asia). Beginning inventory of S12L7 for the first quarter of 20Y1 was 340 boxes. The company's policy is to have 20% of the next quarter's sales of S12L7 in ending inventory. Beginning inventory of S12L5 was 170 boxes. The company's policy is to have 30% of the next quarter's sales of S12L5 in ending inventory. Required: Prepare a production budget for each quarter for 20Y1 and for the year in total. Stillwater Designs Production Budget for S12L7 For the Year Ended December 31, 20Y1 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year Sales Desired ending inventory Total needs Less: Beginning inventory Units produced Prepare a production budget for each quarter for 20Y1 and for the year in total. If required, round your answers to nearest whole value. Stillwater Designs Production Budget for S12L5 For the Year Ended December 31, 20Y1 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year Sales Desired ending inventory Total needs Less: Beginning inventory Units produced
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.
Production Budget
Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers) for the coming five quarters are as follows:
| S12L7 | S12L5 | ||
| First quarter, 20Y1 | 1,120 | 1,820 | |
| Second quarter, 20Y1 | 3,080 | 1,960 | |
| Third quarter, 20Y1 | 7,840 | 7,420 | |
| Fourth quarter, 20Y1 | 6,440 | 5,460 | |
| First quarter, 20Y2 | 1,260 | 1,680 |
The vice president of sales believes that the projected sales are realistic and can be achieved by the company.
Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Asia). Beginning inventory of S12L7 for the first quarter of 20Y1 was 340 boxes. The company's policy is to have 20% of the next quarter's sales of S12L7 in ending inventory. Beginning inventory of S12L5 was 170 boxes. The company's policy is to have 30% of the next quarter's sales of S12L5 in ending inventory.
Required:
Prepare a production budget for each quarter for 20Y1 and for the year in total.
| Stillwater Designs | |||||
| Production Budget for S12L7 | |||||
| For the Year Ended December 31, 20Y1 | |||||
| 1st Qtr. | 2nd Qtr. | 3rd Qtr. | 4th Qtr. | Year | |
| Sales | |||||
| Desired ending inventory | |||||
| Total needs | |||||
| Less: Beginning inventory | |||||
| Units produced |
Prepare a production budget for each quarter for 20Y1 and for the year in total. If required, round your answers to nearest whole value.
| Stillwater Designs | |||||
| Production Budget for S12L5 | |||||
| For the Year Ended December 31, 20Y1 | |||||
| 1st Qtr. | 2nd Qtr. | 3rd Qtr. | 4th Qtr. | Year | |
| Sales | |||||
| Desired ending inventory | |||||
| Total needs | |||||
| Less: Beginning inventory | |||||
| Units produced |
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