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Aron Company makes computer screens, Model 1 and Model 2. Aron anticipates selling the screens as...

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Accounting

Aron Company makes computer screens, Model 1 and Model 2. Aronanticipates selling the screens as follows:

Unit of

Units of

Model 1

Model 2

Quarter ending 3/31

5,000

6,000

Quarter ending 6/30

4,500

5,500

Quarter ending 9/30

5,500

6,500

Quarter ending 12/31

6,000

7,000

The inventory on 1/1/18 is 2500 units of Model 1 and 3000 unitsof Model 2. Aron wants to have on hand 45% of the anticipated salesof the following month for each model. Prepare a production budgetfor the first 3 quarters of 2018 for both models.

Answer & Explanation Solved by verified expert
3.7 Ratings (604 Votes)

--Production Budgets

Production Budget for Model 1
Q1 Q2 Q3 Total
Budgeted units to be sold                          5,000                                       4,500                     5,500                                         15,000
Add: Desired ending inventory                          2,025                                       2,475                     2,700                                           2,700
Total units needed                          7,025                                       6,975                     8,200                                         17,700
Less: Beginning units available                          2,500                                       2,025                     2,475                                           2,500
Units to be produced                          4,525                                       4,950                     5,725                                         15,200
Production Budget for Model 2
Q1 Q2 Q3 Total
Budgeted units to be sold                          6,000                                       5,500                     6,500                                         18,000
Add: Desired ending inventory                          2,475                                       2,925                     3,150                                           3,150
Total units needed                          8,475                                       8,425                     9,650                                         21,150
Less: Beginning units available                          3,000                                       2,475                     2,925                                           3,000
Units to be produced                          5,475                                       5,950                     6,725                                         18,150

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