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Budgeted unit sales

40,000

60,000

100,000

50,000

70,000

80,000

Selling price per unit

$8

per unit

Accounts receivable, beginning balance

$65,000

Sales collected in the quarter sales are made

75%

Sales collected in the quarter after sales are made

25%

Desired ending finished goods inventory is

30%

of the budgeted unit sales of the next quarter

Finished goods inventory, beginning

12,000

units

Raw materials required to produce one unit

5

pounds

Desired ending inventory of raw materials is

10%

of the next quarter's production needs

Raw materials inventory, beginning

23,000

pounds

Raw material costs

$0.80

per pound

Raw materials purchases are paid

60%

in the quarter the purchases are made

and

40%

in the quarter following purchase

Accounts payable for raw materials, beginning balance

$81,500

Enter a formula into each of the cells marked with a ? below

Construct the production budget

Year 2 Quarter

Year 3 Quarter

1

2

3

4

Year

1

2

Budgeted unit sales

?

?

?

?

?

?

?

Add desired finished goods inventory

?

?

?

?

?

?

Total needs

?

?

?

?

?

?

Less beginning inventory

?

?

?

?

?

?

Required production

?

?

?

?

?

?

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