1. Sales Budget: Johnson Inc. sells high-tech staplers. Johnson is preparing bud
ID: 2554653 • Letter: 1
Question
1. Sales Budget: Johnson Inc. sells high-tech staplers. Johnson is preparing budgets for the quarter ending September 30, 2017. The sales price is $14.00 per stapler. Johnson expects the following number of units to be sold in the coming year: Required: Prepare a sales budget for the third quarter of the coming year, showing units and sales revenue by month and in total for the quarter.
Check Figure: Total projected sales revenue for the quarter - $700,000
July - 10,000
August - 25,000
September - 15,000
October - 12,500
I got this correct, but it correlates with the second problem which is what I am having trouble with on the "check figure"
2. Production Budget: Johnson wants ending inventory to be 15 percent of the next month’s budgeted sales in units. 4,000 units were on hand June 30. Required: Prepare a production budget for the third quarter of the year. Show the number of staplers that should be produced each month as well as for the quarter in total. Check Figure: Total budgeted product units to produce for the quarter – 47,875
I keep getting the total of 48,250 and can not figure out why.
July August September Total October 10,000 25,000 15,000 50,000 12,500 $14 $14 $14 $14 $14 140,000 350,000 210,000 700,000 175,000Explanation / Answer
Production budget July August September Quarter Budgeted sales 10,000 25000 15000 50,000 Add Ending inventory 3750 2250 1875 1,875 Total needs 13,750 27,250 16,875 51,875 Less beginning inventory 4000 3750 2250 4,000 Units to be produced 9,750 23,500 14,625 47,875
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