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Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follows.
The January 1, 2017, inventory of HD-240 is 2,200 units. Management desires an ending inventory each quarter equal to 40% of the next quarter?s sales. Sales in the first quarter of 2018 are expected to be 25% higher than sales in the same quarter in 2017.
Prepare quarterly production budgets for each quarter and in total for 2017.
| TURNEY COMPANY |
For the Year Ending December 31, 2017For the Month Ended December 31, 2017For the Quarter Ended December 31, 2017
|Expected Unit SalesRequired Production UnitsTotal Materials RequiredDesired Ending Finished Goods UnitDirect Materials Per UnitTotal Required UnitsBeginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct MaterialsDirect Materials Purchases|
|AddLess: Required Production UnitsDirect Materials Per UnitDesired Ending Finished Goods UnitDirect Materials PurchasesExpected Unit SalesTotal Materials RequiredTotal Required UnitsBeginning Finished Goods UnitBeginning Direct MaterialsDesired Ending Direct Materials|
|Beginning Finished Goods UnitDirect Materials PurchasesTotal Materials RequiredTotal Required UnitsExpected Unit SalesDesired Ending Direct MaterialsBeginning Direct MaterialsDirect Materials Per UnitDesired Ending Finished Goods UnitRequired Production Units|
|AddLess: Desired Ending Direct MaterialsDirect Materials PurchasesExpected Unit SalesDesired Ending Finished Goods UnitTotal Materials RequiredDirect Materials Per UnitRequired Production UnitsTotal Required UnitsBeginning Finished Goods UnitBeginning Direct Materials|
|Total Required UnitsBeginning Finished Goods UnitRequired Production UnitsDesired Ending Finished Goods UnitDesired Ending Direct MaterialsDirect Materials Per UnitTotal Materials RequiredBeginning Direct MaterialsDirect Materials PurchasesExpected Unit Sales|
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