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Production Budget Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells...

Production Budget

Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers) for the coming five quarters are as follows:

S12L7 S12L5
First quarter, 20Y1 920 1,495
Second quarter, 20Y1 2,530 1,610
Third quarter, 20Y1 6,440 6,095
Fourth quarter, 20Y1 5,290 4,485
First quarter, 20Y2 1,035 1,380

The vice president of sales believes that the projected sales are realistic and can be achieved by the company.

Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Asia). Beginning inventory of S12L7 for the first quarter of 20Y1 was 340 boxes. The company's policy is to have 20% of the next quarter's sales of S12L7 in ending inventory. Beginning inventory of S12L5 was 170 boxes. The company's policy is to have 30% of the next quarter's sales of S12L5 in ending inventory.

Required:

Prepare a production budget for each quarter for 20Y1 and for the year in total.

Stillwater Designs
Production Budget for S12L7
For the Year Ended December 31, 20Y1
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year
Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced

Prepare a production budget for each quarter for 20Y1 and for the year in total. If required, round your answers to nearest whole value.

Stillwater Designs
Production Budget for S12L5
For the Year Ended December 31, 20Y1
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year
Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced

Solutions

Expert Solution

Solution

Stillwater Designs
Production Budget for S12L7
For the Year Ended December 31, 20Y1
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year
Sales 920 2530 6440 5290 15180
Desired ending inventory 506 1288 1058 207 207
Total needs 1426 3818 7498 5497 15387
Less: Beginning inventory 340 506 1288 1058 340
Units produced 1086 3312 6210 4439 15047

.

Stillwater Designs
Production Budget for for S12L5
For the Year Ended December 31, 20Y1
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year
Sales                1,495                1,610               6,095               4,485                13,685
Desired ending inventory                   483                1,829               1,346                  414                    414
Total needs                1,978                3,439               7,441               4,899                14,099
Less: Beginning inventory                   170                   483               1,829               1,346                    170
Units produced                1,808                2,956               5,612               3,554                13,929

ekkarill92 answered 1 year ago
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