Question

Purchases and Cash Disbursements Budget Review - FINAL Ram Jam's Confections manufactures specialty pies with graham cracker crusts and sells to local bakeries in the Tampa Bay area. When preparing their budget for 2019, they estimated their pie sales as follows: January - 7,000 pies; February - 8,000 pies; March -9,000 pies; and April 9,500 pies. When they makes their pies, they like to have at least 5% of the next month's sales on hand at the end of each month, in case they have underestimated their budget. They buy all of their ingredients from one supplier, and the ingredients cost $3 per pie. They buy all ingredients on credit. When purchasing on credit, they pay the supplier 40% of the amount purchased within the same month, and the remaining 60% within the following month. Their accounts payable balance on 1/1/19 was $3,500. a. Prepare the production budget for Ram Jam's Confections for the 1st quarter of 2019. Jan. Feb. Mar.

Answer 1

Answer is given below

Production Budget for 1st Quarter of 2019 January February March Sales 7,000 8,000 9,000 Desired Closing Inventory 450 475 Total Needs 7,400 8,450 9,475 Less: Opening Inventory 350 4001 Production in Units 7,050 8,050 9,025 400 Total 24,000 475 24,475 350 24,125 4500 Note: Closing stock for March will be 5% of April Sales Opening Stock for January will be 5% of January Sales