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Your answer is partially correct. Try again Sheridan Company is preparing its master budget for 2020. Relevant data pertaining to its sales, production, and direct materials budgets are as follows Sales. Sales for the year are expected to total 1,100,000 units. Quarterly sales are 22%, 27%, 26%, and 25%, respectively. The sales price is expected to be $38 per unit for the first three quarters and $45 per unit beginning in the fourth quarter. Sales in the first quarter of 2021 are expected to be 15% higher than the budgeted sales for the first quarter of 2020. Production. Management desires to maintain the ending finished goods inventories at 25% of the next quarter's budgeted sales volume Direct materials. Each unit requires 2 pounds of raw materials at a cost of $10 per pound. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for first quarter of 2021 are 492,000 pounds Prepare the sales, production, and direct materials budgets by quarters for 2020. SHERIDAN COMPANY Sales Budget For the Year Ending December 31, 2020 Quarter 1 4 Year Expected Unit Sales 275000 297000 286000 242000 1100000 38 38 38 45 Unit Selling Price 12375000 11286000 9196000 10868000 43725000 Total Sales wwwwwwwwwww wwww ww

Answer 1

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Solution SHERIDAN COMPANY Sales Budget For the Year Ending December 31, 2020 Quarter 3 242,000 297,000 286,000 $38. $38 $38 $9,196,000 $11,286,000 $10,868,000 Year 1,100,000 Expected Unit Sales Unit Selling price Total Sales 275,000| $45 $12,375,000 $43,725,000 Year SHERIDAN COMPANY Production Budget For the Year Ending December 31, 2020 Quarter 2 242,000 297,000 74,250 71,500 316,250 368,500 | 60,500 74,250 255,750 294,250 Expected Unit Sales Add: Desired Ending Finished Goods Units Total Required Units Less: Beginning Finished Goods Units Required Production Units 3 286,000 68,750 354,750 71,500 2 83,250 4 275,000 69,575 344,575 68,750 275,825 1,109,075 SHERIDAN COMPANY Direct Materials Budget For the Year Ending December 31, 2020 Quarter Year 294,250 283,250 4 275,825 Units to be produced Direct Materials per unit Total Pounds required for Production Add: Desired Ending Direct Materials (Pounds) Total Materials required Less: Beginning Direct Materials (Pounds) Direct Materials Purchases (Pounds) Cost per Pound Total Cost of Direct Materials Purchases 255,7501 2 511,500 58,850 570,350 51,150 519,200 $10 $5,192,000 588,500 56,650 645,150 58,850 586,300 $10 $5,863,000 566,500 55,165 621,665 56,650 565,015 $101 $5,650,150 551,650 49,200 600,8501 55,165 545,685 $100 $5,456,850 $22,162,000

1 Solution SHERIDAN COMPANY Sales Budget For the Year Ending December 31, 2020 Quarter vain Year 1100000 =G8*2296 G9°2796 =G8°2696 -G8*25% Expected Unit Sales Unit Selling price Total Sales 38 10 =C8*C9 | =D8*D9 =E8 E9 =F8*F9 |-SUM(C10:F10) SHERIDAN COMPANY Production Budget For the Year Ending December 31, 2020 Quarter 14 17 19 Expected Unit Sales Add: Desired Ending Finished Goods Units Total Required Units Less: Beginning Finished Goods Units Required Production Units =C8 =D8 = E8 F 8 =D172596 =E172596 =F172596 =(C811596)*2596 -SUM(C17:C18) I-SUM(D17:D18) I-SUM(E17:E18) I-SUM(F17:F18) =C172596 =D17*25% =E1725% =F172596 =C19-C20 =D19-D20 =E19-E20 =F19-F20 20 21 =SUM(C21:F21) SHERIDAN COMPANY SHERIDAN COMPANY Direct Materials Budget For the Year Ending December 31, 2020 Quarter 2 =C21 =D21 =E21 4 EF21 29 30 31 32 Units to be produced Direct Materials per unit Total Pounds required for Production Add: Desired Ending Direct Materials (Pounds) Total Materials required Less: Beginning Direct Materials (Pounds) Direct Materials Purchases (Pounds) Cost per Pound Total Cost of Direct Materials Purchases =C28°29 =D30*1096 -C30+C31 =C30*1096 -C32-33 =D28D29 =E30*10% =D30+D31 =D30*10% =D32-D33 =E28 E29 =F30*10% =E30+E31 =E30*10% =E32-E33 33 =F28F29 -492000 10% =F30+F31 =F30*10% =F32-F33 10 =F34*F35 34 35 10 10 36 | =C34*C35 =D34*D35 =E34*E35 -SUM(C36:F36)