Question

Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follows.

Quarter		HD-240
1		5,200
2		7,240
3		8,360
4		10,310

The January 1, 2017, inventory of HD-240 is 2,080 units. Management desires an ending inventory each quarter equal to 40% of the next quarter’s sales. Sales in the first quarter of 2018 are expected to be 25% higher than sales in the same quarter in 2017.

Prepare quarterly production budgets for each quarter and in total for 2017.

TURNEY COMPANY Production Budget choose the accounting periodFor the Quarter Ended December 31, 2017For the Month Ended December 31, 2017For the Year Ending December 31, 2017 For the Year Ending December 31, 2017For the Month Ended December 31, 2017For the Quarter Ended December 31, 2017
Product HD-240
	Quarter
		1		2		3		4		Year
select an opening Production Budget itemRequired Production UnitsDirect Materials PurchasesTotal Materials RequiredBeginning Direct MaterialsDesired Ending Direct MaterialsTotal Required UnitsExpected Unit SalesBeginning Finished Goods UnitDirect Materials Per UnitDesired Ending Finished Goods Unit Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units		Enter a number of units		Enter a number of units		Enter a number of units		Enter a number of units
select between addition and deductionAddLess AddLess: select a production budget item Direct Materials PurchasesBeginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Finished Goods UnitRequired Production UnitsTotal Required UnitsDesired Ending Direct MaterialsDirect Materials Per UnitTotal Materials RequiredExpected Unit Sales Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required 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 partBeginning Finished Goods UnitDesired Ending Finished Goods UnitBeginning Direct MaterialsDirect Materials Per UnitTotal Required UnitsDesired Ending Direct MaterialsRequired Production UnitsDirect Materials PurchasesTotal Materials RequiredExpected Unit Sales Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units		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 deductionAddLess AddLess: select a production budget item Desired Ending Finished Goods UnitTotal Required UnitsDirect Materials PurchasesDesired Ending Direct MaterialsTotal Materials RequiredBeginning Finished Goods UnitBeginning Direct MaterialsExpected Unit SalesRequired Production UnitsDirect Materials Per Unit Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units		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 itemBeginning Direct MaterialsExpected Unit SalesDesired Ending Direct MaterialsDirect Materials Per UnitDirect Materials PurchasesTotal Materials RequiredDesired Ending Finished Goods UnitBeginning Finished Goods UnitTotal Required UnitsRequired Production Units Beginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units		enter a total amount for the Production Budget		enter a total amount for the Production Budget		enter a total amount for the Production Budget		enter a total amount for the Production Budget		enter a total amount for the Production Budget

Answer 1

Solution

TURNEY COMPANY
Production budget
For year ending December 2017
	Product HD-240
	Quarter
	1	2	3	4	Year
Units to be sold	5200	7240	8360	10310	31110
Desired Ending Finished Inventory	2896	3344	4124	2600*	2600
Total Units needed	8096	10584	12484	12910	33710
Less : Beginning Finished Inventory	2080	2896	3344	4124	2080
Units to be Produced	6016	7688	9140	8786	31630

*5200 x 125% x 40%