Question

Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2020 sales forecast is as follows.

Quarter		HD-240
1		5,100
2		7,320
3		8,280
4		10,430

The January 1, 2020, inventory of HD-240 is 2,040 units. Management desires an ending inventory each quarter equal to 40% of the next quarter’s sales. Sales in the first quarter of 2021 are expected to be 25% higher than sales in the same quarter in 2020.

Prepare quarterly production budgets for each quarter and in total for 2020.

TURNEY COMPANY Production Budget choose the accounting period For the Year Ending December 31, 2020For the Quarter Ended December 31, 2020For the Month Ended December 31, 2020
Product HD-240
	Quarter
		1		2		3		4		Year
select an opening production budget item Direct Materials PurchasesExpected Unit SalesDirect Materials Per UnitBeginning Finished Goods UnitRequired Production UnitsTotal Materials RequiredTotal Required UnitsBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods Unit		enter a number of units		enter a number of units		enter a number of units		enter a number of units
select between addition and deduction AddLess : select a production budget item Desired Ending Direct MaterialsTotal Required UnitsDirect Materials PurchasesRequired Production UnitsBeginning Direct MaterialsDesired Ending Finished Goods UnitTotal Materials RequiredBeginning Finished Goods UnitDirect Materials Per UnitExpected Unit Sales		enter a number of units		enter a number of units		enter a number of units		enter a number of units
select a summarizing line for the first part Required Production UnitsDirect Materials Per UnitBeginning Direct MaterialsDirect Materials PurchasesDesired Ending Direct MaterialsDesired Ending Finished Goods UnitTotal Required UnitsBeginning Finished Goods UnitTotal Materials RequiredExpected Unit Sales		enter a total number of units for the first part		enter a total number of units for the first part		enter a total number of units for the first part		enter a total number of units for the first part
select between addition and deduction AddLess : select a production budget item Direct Materials Per UnitTotal Required UnitsBeginning Finished Goods UnitBeginning Direct MaterialsDirect Materials PurchasesRequired Production UnitsDesired Ending Finished Goods UnitDesired Ending Direct MaterialsExpected Unit SalesTotal Materials Required		enter a number of units		enter a number of units		enter a number of units		enter a number of units
select a closing production budget item Desired Ending Direct MaterialsBeginning Direct MaterialsDesired Ending Finished Goods UnitBeginning Finished Goods UnitDirect Materials PurchasesDirect Materials Per UnitExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units		enter a total number of units		enter a total number of units		enter a total number of units		enter a total number of units		enter a total number of units

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Answer 1

Answer
Turney Company
Production Budget Year 2020
Product HD-240                                                  Units
Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Sales (A)	5,100	7,320	8,280	10,430
Closing Stock (B) (Working )	2,928	3,312	4,172	2,550
Total Units Required C= (A+B)	8,028	10,632	12,452	12,980
Opening Stock (D)	2,040	2,928	3,312	4,172
Units To be Produced	10,068	13,560	15,764	17,152
Working : 1 Closing Stock
Calculation of Closing Stock
Particulars	Q1	Q2	Q3	Q4
Sales of Next Quarter (A)	7,320	8,280	10,430	6,375
40% of A	2,928	3,312	4,172	2,550
Working :2 Sales of Q1 2021
Sales of Q1 2021=(25% More than Sales in Q1 2020 (5100 X 125%)	6375