Question

Question 2 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 7,440 3 8,350 4 10,350 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 Quarter Ended December 31, 2020For the Year Ending 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 SalesDesired Ending Direct MaterialsDirect Materials Per UnitBeginning Direct MaterialsRequired Production UnitsDesired Ending Finished Goods UnitTotal Materials RequiredTotal Required UnitsBeginning 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 Total Materials RequiredTotal Required UnitsDesired Ending Direct MaterialsDirect Materials Per UnitDirect Materials PurchasesBeginning Finished Goods UnitBeginning Direct MaterialsExpected Unit SalesDesired Ending Finished Goods UnitRequired Production Units 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 Expected Unit SalesTotal Required UnitsBeginning Finished Goods UnitBeginning Direct MaterialsRequired Production UnitsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesTotal Materials Required 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 Beginning Finished Goods UnitDesired Ending Direct MaterialsDirect Materials Per UnitExpected Unit SalesBeginning Direct MaterialsDesired Ending Finished Goods UnitRequired Production UnitsDirect Materials PurchasesTotal Required UnitsTotal 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 MaterialsDesired Ending Finished Goods UnitDirect Materials PurchasesBeginning Direct MaterialsRequired Production UnitsBeginning Finished Goods UnitDirect Materials Per UnitExpected Unit SalesTotal 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

Answer 1

TURNEY COMPANY Production Budget For the year Ending December 31, 2020 Product HD 240 Quarter 1 | 2 | 3 | 5100 7440 8350 2976 3340 4 140 8076 10780 12490 2040 2976 3340 6036 7804 9150 Year Expected units sales Add: Desire Ending Inventory Total required units Less: Beginning Inventory Required production units 4 10350 2550 12900 4140 8760 31750 Working notes: Ending Inventory is 40% of next quarter sales 1 Quarter = 7440 * 40/100 = 2976 2 Quarter = 8350*40/100 = 3340 3 Quarter = 10350* 40/100 = 4140 4 Quarter = (5100 *125 /100 = 6375 * 40/100= 2550 Beginning Inventory is previous quarter Ending Inventory 1 Quarter = 2040 2 Quarter = 2976 3 Quarter = 3340 4 Quarter = 4140