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In: Accounting
Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects...
Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales: January 41,000 February 38,000 March 50,000 April 51,000 Patrick's policy is to have 25% of next month's sales in ending inventory. On January 1, it is expected that there will be 6,700 drums of solvent on hand. Required: Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total. Patrick Inc. Production Budget For the Coming Quarter January February March 1st Quarter Total Sales Desired ending inventory Total needs Less: Beginning inventory Units to be produced
Solutions
Expert Solution
- Production Budget, as asked
|
January |
February |
March |
1st Quarter |
|
|
Total Sales |
41,000 |
38,000 |
50,000 |
129,000 |
|
Desired ending Inventory |
9,500 [38000 x 25%] |
12,500 [50000 x 25%] |
12,750 [51000 x 25%] |
12,750 |
|
Total needs |
50,500 |
50,500 |
62,750 |
141,750 |
|
Less: Beginning Inventory |
6,700 |
9,500 |
12,500 |
6,700 |
|
Units to be produced |
43,800 |
41,000 |
50,250 |
135,050 |
ekkarill92 answered 1 year agoRelated Solutions
Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects...
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January
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February
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March
50,000
April
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Patrick's policy is to have 23% of next month's sales in ending
inventory. On January 1, it is expected that there will be 4,500
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