Living Corner sells home wares and various other reading-related products. One of the store's most popular products is the fluffy lounge pillow. The pillow each sell for $16.00. Originally the pillows were handmade by a local artisan. The stores owner has been impressed with the demand for the pillow and has recently begun a small manufacturing company to produce and distribute the pillows to other stores. Estimated sales for the fourth quarter in units are as follows:

October...............................8500

November............................9200

December.............................11600

Total.......................................29300

Each pillow requires half a meter of fabric that costs, on average, $13 per meter.

Required

a. Prepare a sales budget for the fourth quarter based on the above information.

b. Prepare a production budget for the pillow manufacturing company. The company did not have any inventory at the end of September, but they want to maintain a 20 per cent inventory at the end of each month abased on the next month's estimated sales. January's sales are expected to below the post-holiday trends and are estimated to be 5800 units.

Answer rating: 100% (QA)

Sales Budget for fourth Quarter Budgeted Sales Amount Octobar 1... View the full answer