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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

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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 2 years ago
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