Question
In: Accounting
Carter's BBQ Restaurant produces BBQ sauce for resale at grocery stores throughout North America. The company...
Carter's BBQ Restaurant produces BBQ sauce for resale at
grocery stores throughout North America. The company is currently
in the process of establishing a master budget on a quarterly basis
for this coming fiscal year, which ends December 31. Prior year
quarterly sales were as follows (1 unit = 1 batch):
First quarter
67,200 units
Second quarter
80,640 units
Third quarter
100,800 units
Fourth quarter
87,360 units
Unit sales are expected to increase 25%, and each unit is
expected to sell for $8. The management prefers to maintain ending
finished goods inventory equal to 10% of next quarter's sales.
Assume that finished goods inventory at the end of the fourth
quarter budget period is estimated to be 9,000 units.
Using Excel prepare a sales budget for Carter's BBQ Restaurant
using a format similar to Figure 9.3, "Sales Budget for Jerry's Ice
Cream." (Hint: Be sure to increase last year's unit sales by
25%.)
Using Excel prepare a production budget for Carter's BBQ
Restaurant using the format shown in Figure 9.4, "Production Budget
for Jerry's Ice Cream."
Solutions
Expert Solution
| Sales Budget | |||||
| Particulars | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Total |
| Sales units | 67,200 | 80,640 | 1,00,800 | 87,360 | 3,36,000 |
| Add. Increase (25%) | 16,800 | 20,160 | 25,200 | 21,840 | 84,000 |
| Projected sales in Units | 84,000 | 1,00,800 | 1,26,000 | 1,09,200 | 4,20,000 |
| Sales price per unit | $ 8.00 | $ 8.00 | $ 8.00 | $ 8.00 | |
| Sales amount | $ 6,72,000 | $ 8,06,400 | $ 10,08,000 | $ 8,73,600 | $ 3360000 |
| Production Budget | |||||
| Particulars | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Total |
| Sales units | 84,000 | 1,00,800 | 1,26,000 | 1,09,200 | 4,20,000 |
| Add : Closing Stock Required (10% of next quarter sales) | 10,080 | 12,600 | 10,920 | 9000 | |
| Total Goods Required | 94,080 | 1,13,400 | 1,36,920 | 1,18,200 | 4,62,600 |
|
Less : Opening Stock (For Quarter 1 - considered 10% of estimated sales) |
8,400 | 10,080 | 12,600 | 10,920 | |
| Production Required (units) | 85,680 | 1,03,320 | 1,24,320 | 1,07,280 | 4,20,600 |
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