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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."

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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

ekkarill92 answered 1 year ago
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