Question

Problem 5-31 Vaughn Enterprises is a boutique guitar manufacturer. The company produces both acoustic and electric guitars for rising and established professional musicians. Vanessa Aaron, the company's sales manager, prepared the following sales forecast for 2018. The forecasted sales prices include a 5% increase in the acoustic guitar price and a 10% increase in the electric guitar price, to cover anticipated increases in raw materials prices. Acoustic guitar sales Electric guitar sales Sales Price $1,200 $2,350 1st Quarter 190 400 2nd Quarter 250 370 3rd Quarter 310 300 4th Quarter 325 370 Your answer is correct. Prepare Vaughn's sales budget for 2018. Sales Budget 2nd Quarter 1st Quarter 3rd Quarter 4th Quarter Annual Acoustic: 2 Budgeted units sold 250 1075 T Budgeted sales price 4 1200 1200 1200 1200 1200 L 200 1200 | Budgeted revenue 300000 372000 1290000 Electric: Budapted units cold and 7 2017 2017 2017 jaan)

Answer 1

Production Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Annual
Budgeted Sales units	190	250	310	325	1075
Add : Desired Ending Inventory	100	124	130	96	96
Units Required	290	374	440	421	1171
Less : Beginning Inventory	30	100	124	130	30
Production Required	260	274	316	291	1141

Purchase Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Annual
Production Required	260	274	316	291	1141
Standard Necks per guitar	1.5	1.5	1.5	1.5	1.5
Production Needs	390	411	474	437	1712
Budgeted Ending inventory	206	237	219	350	350
Total DM Required	596	648	693	787	2062
Beginning Inventory	410	206	237	219	410
Budgeted Purchases	186	442	456	568	1652
Standard Price per neck	$                45	$                   45	$                45	$                      45	$               45
Budgeted Purchases Cost	$          8,370	$          19,890	$        20,520	$              25,560	$       74,340