Question

12UUU, L werhead costs were as follow Indicele € 280000; Utilities: € 35000; Other: € 18900 Prepare a schedule of cost of goods manufactured Mo's manufactures a ceramic tile. The expected pattern of sales for the next year (20X8) is as follows: Quarter Ist 2nd 3rd 4th Year Sales in 1550 1600 2200 3200 8550 units Alfa desires to have 20% of the following quarter's sales needs in finished-goods inventory at the end of each quarter (On December 31, 20X7, Alfa expects to have 1020 units in inventory). For the first quarter of the next year 20X9 is predicted to be 2100 units. Required: Prepare the Production budget for 20X8. Include a column for each quarter and for the year.

Q. (4)

Answer 1

• Production budget

	1st quarter	2nd quarter	3rd quarter	4th quarter	year
Next quarter's budgeted sales	1,600	2,200	3,200	2,100	9,100
Ending inventory percentage	20%	20%	20%	20%
Ending inventory of finished goods	1600 x 20% = 320	2,200 x 20% = 440	3200 x 20% = 640	2,100 x 20% = 420	1,820
Sales units	1,550	1,600	2,200	3,200	8,550
Total inventory needs	1,870	2040	2840	3620	10,370
Beginning inventory of finished goods	- 1020	- 320	- 440	-640	-2,420
Units to be produced	850	1,720	2,400	2,980	7,950

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