Part 2 Party Time Inc. needs your help to create some of its budgets for the yea
ID: 2524179 • Letter: P
Question
Part 2
Party Time Inc. needs your help to create some of its budgets for the year. All of the firm’s party favor boxes include 6 gold coins, regardless of the party box’s “theme.” Its sales budget for its all of its various party favor boxes combined is as follows:
Party Time Inc. maintains ending finished goods inventory equal to 8% of the budgeted sales for the next quarter. At the end of the year, Party Time Inc. would like to have 750 finished boxes in its warehouse. In addition, Party Time Inc. maintains enough gold coins on hand to start each quarter with 5% of the current quarter’s production needs. The firm wants to end Q4 of the coming year with 3,200 coins on hand.
A) Complete the Production Budget for Party Time Inc. Show your work!
Q1
Q2
Q3
Q4
Year Total
Budgeted Production in Units
B) Refer to prior page information. Complete Party Time Inc.’s Raw Materials Purchases Budget for Gold Coins. (As shown on the Given Info. Sheet, each gold coin costs the firm $0.08 to purchase.) Show your work!
Q1
Q2
Q3
Q4
Year Total
Budgeted Cost of RM Purchases
Party Time Inc. Sales Budget For the Year Ended Dec. 31, 2018Explanation / Answer
Requirement A) Production Budget for Party Time 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual Budgeted sales units 11000 12300 14000 13600 50900 Add : Closing Inventory 984 1120 1088 750 984 Total 11984 13420 15088 14350 51884 Less : Opening inventory 880 984 1120 1088 880 Required production 11104 12436 13968 13262 51004 Requirement B) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual Required production 11104 12436 13968 13262 50770 Raw material required per unit 66624 74616 83808 79572 304620 Add : closing raw materials inventory 3730.8 4190.4 3978.6 3200 3200 Total Raw material needed 70354.8 78806.4 87786.6 82772 307820 Less : Opening stock of raw materials 3331.2 3730.8 4190.4 3978.6 3331.2 Total raw material required 67023.6 75075.6 83596.2 78793.4 304488.8 Cost of each gold coin 0.8 0.8 0.8 0.8 0.8 Budgeted Cost of Raw materials Purchase 53618.88 60060.48 66876.96 63034.72 243591.04
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