Sheet 2: Sheet 2- Worksheet

Data	Year 2 Quarter				Year 3 Quarter
	1	2	3	4	1	2
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

Create 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	?	?	?	?	?	?