Problem #1

Based on the following production and sales data of Winters, Inc. for February 20XX of the current year, prepare (a) sales budget and (b) a production budget.

Product X9RRProduct TX45

Estimated Inventory31,000 units24,000 units

Desired Inventory, Feb 2835,000 units18,000 units

Expected sales volume:

Region I450,000 units290,000 units

Region II204,000 units160,000 units

Unit sales price$ 9.00$ 16.00

Problem #2

Brentwood Labs performs a specialty lab companies for $ 60 per test. For the upcoming quarter, Brentwood is projecting the following sales:

JanuaryFebruaryMarch

Number of lab tests6,8005,6006,660

The budgeted cost of performing each test is $35. Operating expenses are projected to be $70,000 in January, $58,000 in February, and $68,000 in March. Brentwood Labs is subject to a corporate tax rate of 20%.

Required:

provide a budgeted income statement for the first quarter, with a column for each month and for the quarter.