You are the manager of the production plant for ABC company. The company prepares master budgets...
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You are the manager of the production plant for ABC company. The company prepares master budgets based on the following: ABC expects to start the first quarter with 2,100 units in finished goods inventory. Desired ending finished goods inventory each quarter equals 15% of the next quarter's budgeted sales. • Desired ending finished goods inventory for the fourth quarter is 2,350 units. • Budgeted sales in units for the year are as follows: 1st quarter 8,200 2nd quarter 10,200 3rd quarter 12,200 4th quarter 11,200 The new Analyst has prepared the production budget for your review. For the production budget presented below, identify at least two errors and provide an explanation of each error and provide both an explanation of the correction needed and the corrected calculated values. Production Budget 1st 2nd 3rd 4th Year Quarter Quarter Quarter Quarter Budgeted sales (units) 8,200 10,200 12,200 11,200 41,800 Desired ending inventory 2,100 1,830 1,680 2,350 7.390 Total units needed 9,730 12,030 13,880 13,550 44,150 Beginning inventory 2,100 1,830 1,680 2,350 2,350 Required production 7,630 10,500 12,050 11,870 42,050 You are the manager of the production plant for ABC company. The company prepares master budgets based on the following: ABC expects to start the first quarter with 2,100 units in finished goods inventory. Desired ending finished goods inventory each quarter equals 15% of the next quarter's budgeted sales. • Desired ending finished goods inventory for the fourth quarter is 2,350 units. • Budgeted sales in units for the year are as follows: 1st quarter 8,200 2nd quarter 10,200 3rd quarter 12,200 4th quarter 11,200 The new Analyst has prepared the production budget for your review. For the production budget presented below, identify at least two errors and provide an explanation of each error and provide both an explanation of the correction needed and the corrected calculated values. Production Budget 1st 2nd 3rd 4th Year Quarter Quarter Quarter Quarter Budgeted sales (units) 8,200 10,200 12,200 11,200 41,800 Desired ending inventory 2,100 1,830 1,680 2,350 7.390 Total units needed 9,730 12,030 13,880 13,550 44,150 Beginning inventory 2,100 1,830 1,680 2,350 2,350 Required production 7,630 10,500 12,050 11,870 42,050
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Ending inventory of previous quarter is the beginning inventory ... View the full answer
Related Book For
Managerial Economics and Business Strategy
ISBN: 978-0071267441
7th Edition
Authors: Michael R. baye
Posted Date:
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