Thanks for your help!! Pletcher Company produces and sells automobile batteries,

Question

Thanks for your help!!
Pletcher Company produces and sells automobile batteries, the heavy-duty HD-240. The 2011 sales budget is as follows.

Quarter HD-240
1 5,300
2 6,540
3 8,130
4 11,660

The January 1, 2011, inventory of HD-240 is 2,560 units. Management desires an ending inventory each quarter equal to 40% of the next quarter's sales. Sales in the first quarter of 2012 are expected to be 30% higher than sales in the same quarter in 2011.

Prepare quarterly production budgets for each quarter and in total for 2011.

Explanation / Answer

Production Budget for the Year of 2011 2012 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter Budgeted Sales 5300 6540 8130 11660 6890 Inventory Used: Opening Inventory 2560 2616 3252 4664 Ending Inventory 2616 3252 4664 2756 Inventory purchases 5356 7176 9542 9752 Working: 2012 1quarter Sale = 30% higer than same quarter = 5300 *130% = 6890 Inventory Purchases = Sales + Closing Inventory - Opening Inventory Opening Inventory = Last month Closing Inventory Thank you....    Production Budget for the Year of 2011 2012 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter Budgeted Sales 5300 6540 8130 11660 6890 Inventory Used: Opening Inventory 2560 2616 3252 4664 Ending Inventory 2616 3252 4664 2756 Inventory purchases 5356 7176 9542 9752

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