Question

Florida State University produces hats and sells them in the Book Store. On March 31, 2019, the Book Store has 1,000 hats in inventory. The hats are sold for $8.00. The Book Store’s policy is to maintain enough hats in inventory equal to 10% of next month’s sales. The Book Store anticipates the following sales activity for the second quarter of the year:

April	7,000 units
May	15,000 units
June	10,000 units

In addition, July’s sales are expected to be 9,000 units.

Required:

A.	Prepare a sales budget for the second quarter of the year.
B.	Prepare a production budget for the second quarter of the year.

(use excel)

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Part A
		April	May	June
Budgeted Sales Unit		7,000	15,000	10,000
Budgeted Selling Price		$            8	$             8	$             8
Budgeted sales		$ 56,000	$ 120,000	$   80,000
Part B
		April	May	June		July
Budgeted Sales Unit		7,000	15,000	10,000		$    9,000
Add: Desired Ending Inventory	10%	1,500	1,000	900
Total needs		8,500	16,000	10,900
Less: beginning Inventory		-1,000	-1,500	-1,000
Budgeted Production		7,500	14,500	9,900

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Part A
		April	May	June
Budgeted Sales Unit		7000	15000	10000
Budgeted Selling Price		8	=C6	=D6
Budgeted sales		=C5*C6	=D5*D6	=E5*E6
Part B
		April	May	June		July
=A5		=C5	=D5	=E5		9000
Add: Desired Ending Inventory	0.1	=D11*$B$12	=E11*$B$12	=G11*B12
Total needs		=SUM(C11:C12)	=SUM(D11:D12)	=SUM(E11:E12)
Less: beginning Inventory		-1000	=-C12	=-D12
Budgeted Production		=SUM(C13:C14)	=SUM(D13:D14)	=SUM(E13:E14)