Exercise 10 1 Alpine Slopes, Inc. produces freestyle snowboards desi n all at 2,

Question

Exercise 10 1 Alpine Slopes, Inc. produces freestyle snowboards desi n all at 2,000 in preparing the 2008 budget for use o ete mountain terrain. Production for 2007, the first year of operations, was snowboards. However, sales have far exceeded predictions. hereo Al pine is projecting sales of 150% of the amount budgeted for 2007. Alpine plans to continue sell the snowboards for $250 each. a. Prepare a sales budget for Alpine for the year 2008. Sales Budget For the Year Ending December 31, 2008 First Quarter Quarter Quarter Quarter Second Third Fourth Year Prior year sales in units 600 800 400 200 2,000 Projected sales (150% of prior year) Sales price per unit Budgeted sales revenue Alpine likes to keep an ending inventory equal to 10 percent of next quarter's sales. Sales in the first quarter of 2009 are budgeted to be 1,080 units. On January 1, 2008, there were 90 snowboards in the finished goods inventory. Prepare a production budget for Alpine for 2008. b.

Explanation / Answer

Sales Budget

For the Year Ending December 31, 2008

Production Budget

For the Year Ending December 31, 2008

First Quarter Second Quarter Third Quarter Fourth Quarter Year Prior year sales in units 600 800 400 200 2,000 Projected sales (150% of prior year) 900 (600*150%) 1,200 (800*150%) 600 (400*150%) 300 (200*150%) 3,000 (2,000*150%) Selling price per unit 250 250 250 250 250 Budgeted sales revenue 225,000 (900*250) 300,000 (1,200*250) 150,000 (600*250) 75,000 (300*250) 750,000 (3,000*250)

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