Question

Production Budget Assume that Stillwater Designs produces two automotive Subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the 5125 sells for $300. Projected sales number of speakers) for the coming five quarters are as follows: S12L7 S12L 5,060 First quarter, 20Y1 880 Second quarter, 2011 Third quarter, 2011 Fourth quarter, 2011 4,290 First quarter, 2012 990 1,320 The vice president of sales believes that the projected sales are realistic and can be achieved by the company Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Anal. Being inventory S12L7 for the first quarter of 2011 was 340 boxes. The company's policy is to have 20% of the next quarter's sales of S12L7 in ending inventory Beginning inventory of S12 was 170 boxes. The company's policy is to have 30% of the next quarter's sales of $125 in ending inventory Required: Prepare a production budget for each quarter for 2011 and for the year in total Stilwater Designs Production Budget for S12L7 For the Year Ended December 31, 2011

Answer 1

Stillwater Designs

Production budget for S12L7

For the year ended December 31,20Y1

	Q1	Q2	Q3	Q4	Total
Expected Selling units	880	2,420	6,160	5,060	14,520
Add: Desired closing units (20% of next quarter sales)	20%(2420) = 484	20%(6160) = 1,232	20%(5060) = 1012	20%(990) = 198	198
Less: Opening units	340	484	1,232	1,012	340
Production units	1,024	3,168	5,940	4,246	14,378

Production budget for S12L5

For the year ended December 31,20Y1

	Q1	Q2	Q3	Q4	Total
Expected selling units	1,430	1,540	5,830	4,290	13,090
Add: Desired ending units {30% of next month sales)	30%(1540) = 462	30%(5830) = 1749	30%(4290) = 1287	30%(1320) = 396	396
Less: Opening units	170	462	1749	1287	170
Production units	1,722	2,827	5,368	3,399	13,316