Question

In: Accounting

Rossini Company has budgeted production for next year as follows: Quarter First Second Third Fourth Units...

Rossini Company has budgeted production for next year as follows:

Quarter First Second Third Fourth
Units to be sold 53,400 80,200 94,000 ?

At the beginning of the year, Rossini is expected have 5,340 units of the product. At the end of each quarter, Rossini would like to have an inventory equal to 10% of the sales units of the next quarter.

How many units should Rossini produce in the second quarter?


A. 80,200 units
B. 81,580 units
C. 56,080 units
D. 78,820 units

E. None of the above

Solutions

Expert Solution

Number of units Rossini should produce in the second quarter: B. 81,580 units

  • At the end of each quarter, Rossini would like to have an inventory equal to 10% of the sales units of the next quarter.
  • Therefore, inventory at the end of each quarter are: (TABLE 1)
  • Quarter First Second
    Sales units for NEXT quarter A             80,200             94,000
    Inventory at the end of the quarter A × 10%                8,020                9,400
  • Note that 2nd row in the above table shows sales units for next quarter. For instance, 80,200 are sales units for the second quarter. Closing inventory for each quarter is 10% of 'A' above as specified in the question.
  • It is given that at the beginning of the year, Rossini is expected to have 5,340 units of the product. i.e. Inventory at the beginning of Quarter 1 = 5,340 units.
  • Now, production units for the first and second quarters are as follows:
  • Quarter First Second
    Beginning inventory                5,340                8,020
    Add: produced units (to be found)             56,080             81,580
    Less: sold units             53,400             80,200
    Closing inventory (table 1)                8,020                9,400
  • We know that closing inventory is found by the following equation:

Closing inventory = Opening inventory + produced units - sold units

  • In this question, we need to find the number of units to be produced. Therefore, rearranging the above equation:

Produced units = Closing inventory - opening inventory + sold units

  • Units produced during the first quarter = 8,020 - 5,340 + 53,400 = 56,080 units
  • Units produced during the second quarter = 9,400 - 8,020 + 80,200 = 81,580 units

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

The Tobler Corporation has budgeted production for next year as follows: Quarter First Second Third Fourth...
The Tobler Corporation has budgeted production for next year as follows: Quarter First Second Third Fourth Production in units 10,000 12,000 16,000 14,000 Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,000 pounds. The raw materials inventory at the end of each quarter should equal 20% of the next quarter's production needs. Budgeted purchases of raw materials in the second quarter would be: Multiple Choice 63,200...
name: ___________________________________________________________ 1. Roberts has budgeted production for next year as follows: Quarter First Second Third...
name: ___________________________________________________________ 1. Roberts has budgeted production for next year as follows: Quarter First Second Third Fourth Budgeted unit sales 9,000 11,000 12,000 14,000 Sales for each quarter of 2020 are listed above for a manufacturing business. The ending finished goods requirement is 10% of the following month’s sales. Four pounds of raw materials are required for each unit produced. The raw materials inventory at the end of each quarter should equal 30% of the next quarter's production needs. The...
ABC Company has budgeted sales for the next six months as follows: Budgeted Sales in Units...
ABC Company has budgeted sales for the next six months as follows: Budgeted Sales in Units March 12,000 units April 24,000 units May 35,000 units June 13,000 units July 43,000 units August 69,000 units ABC Company sells its inventory to customers for $25 per unit. 30% of the company's sales are cash sales and the other 70% of sales are made on account. The sales on account are collected in the pattern: 35% collected in the month of sale 26%...
ABC Company has budgeted sales for the next six months as follows: Budgeted Sales in Units...
ABC Company has budgeted sales for the next six months as follows: Budgeted Sales in Units March 19,000 units April 23,000 units May 34,000 units June 17,000 units July 48,000 units August 69,000 units ABC Company sells its inventory to customers for $16 per unit. 30% of the company's sales are cash sales and the other 70% of sales are made on account. The sales on account are collected in the pattern: 35% collected in the month of sale 26%...
Tilson Company has projected sales and production in units for the second quarter of the coming...
Tilson Company has projected sales and production in units for the second quarter of the coming year as follows:                                                 April                May                 June Sales                                        55,000             45,000             65,000 Production                              65,000             55,000             55,000 Cash-related production costs are budgeted at $7 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $110,000 per month. The accounts payable balance on March...
Q1.ABC Company has projected sales and production in units for the second quarter of 2017 as...
Q1.ABC Company has projected sales and production in units for the second quarter of 2017 as follows Particular April May June sales 35,000 25,000 30,000 Production 30,000 25,000 40,000 Cash production costs are budgeted at SR 7 per unit produced. Of these production costs, 30% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses (all paid in cash) amount to SR 70,000 per month. The accounts payable balance...
Dorothy's budgeted production figures (in units) for burlap sweatshirts for next quarter are shown below:                         &nbs
Dorothy's budgeted production figures (in units) for burlap sweatshirts for next quarter are shown below:                                     July                August             September Expected Production    3,600               4,100                  5,000             Dorothy uses 1.2 yards of burlap per sweatshirt and pays $0.75 per yard of burlap. Dorothy likes to have half of the next month's burlap needs in ending inventory. What is the expected cost of burlap to be purchased for sweatshirts in August? A.        $5,460 B.         $4,550                         D.        $3,285 C.         $4,095                         E.         none of...
ZZ, Inc. has budgeted sales in units for the next six months as follows: Budgeted Sales in Units July...
ZZ, Inc. has budgeted sales in units for the next six months as follows: Budgeted Sales in Units July 7,700 units August 8,300 units September 5,400 units October 10,200 units November ?????? units December 11,700 units The selling price is $18 per unit. 30% of the company's sales are cash sales and 70% of the company's sales are made on account. The sales on account are collected in the pattern 15% in the month of sale, 20% in the month...
Addison Co. budgets production of 2,420 units during the second quarter. Other information is as follows:...
Addison Co. budgets production of 2,420 units during the second quarter. Other information is as follows: Direct labor Each finished unit requires 4 direct labor hours, at a cost of $8 per hour. Variable overhead Applied at the rate of $10 per direct labor hour. Fixed overhead Budgeted at $470,000 per quarter. 1. Prepare a direct labor budget. 2. Prepare a factory overhead budget. Jasper Company has sales on account and for cash. Specifically, 58% of its sales are on...
For the second quarter of the following year Cloaks Company has projected sales and production in...
For the second quarter of the following year Cloaks Company has projected sales and production in units as follows: Jan Feb Mar Sales 56,000 58,000 63,000 Production 60,000 55,000 56,000 Cash-related production costs are budgeted at $8 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the next month. $170,000 per month will account for Selling and administrative expenses. On January 31 the accounts payable balance totals...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT