1 ar 5 Homew x Do Homework - Managerial C...

1 ar 5 Homew x Do Homework - Managerial C X n.com/Student/PlayerHom... s of Acct II K < Question 3, EM5- 23 (similar to) > ? Sat Nov 11 4:00 PM Relaunch to update HW Score: 39.05%, 39.05 of 100 points Part 1 of 2 Points: 0 of Save 30 Novak Company manufactures drinking glasses. One unit is a package of eight glasses, which sells for $10. Novak projects sales for April will be 4,000 packages, with sales increasing by 500 packages per month for May, June, and July. On April 1, Novak has 250 packages on hand but desires to maintain an ending inventory of 20% of the next month's sales. Prepare a sales budget and a production budget for Novak for April, May, and June. Begin by preparing a sales budget for April, May, and June. Novak Company Sales Budget April, May, and June April Budgeted packages to be sold Sales price per package Total sales A May June Total Clear all Check answer B

Transcript

00:01 In the given question for abc company, we need to find out the budgeted production for the january month, february month and march month.

00:10 So first of all, what we will be doing, we will be preparing a production budget for the three different months.

00:16 So first of all, we will be taking the balance of projected sales that is given in the portion.

00:22 So the projected sales for the three months is given to us and for the month of january, it's 200 ,000 units.

00:32 For the month of february, it's 180 ,000 units and for the month of march, it is given to be 210 ,000 units.

00:44 Now, after this we will be taking the balance of desired ending inventory of finished goods.

00:51 So, desired ending finished goods inventory.

01:04 Now, on the question it is given that the company maintained a desired ending finished goods, inventory of 20 % of the next month sales.

01:13 So in the working we will be calculating the desired ending inventory balances.

01:22 So calculation of desired ending inventory of finished goods.

01:39 So for the month of january, the desired ending inventory of finished goods is going to be 20 % of february months projected sales.

01:50 And for the february the projected sales, and for the february is of 180 ,000 units so therefore this balance comes to 36 ,000 units similarly for the month of february the desired ending inventory is going to be 20 % of march month sales and that is 210 ,000 units and this comes to 42 ,000 units as ending inventory balance now finally for the month of march the ending inventory balance is going to be 20 % of april month projected sales and that is given to be $230 ,000 units.

02:32 So this comes to 46 ,000 units as ending inventory for the month of march.

02:39 Now what we will be doing, we will be putting these values in our budget.

02:44 So the desired ending inventory, this balance can be taken from the working notes.

02:49 So for the month of january, we have calculated to be 36 ,000 units.

02:56 For the month of february, this is 42 ,000 units.

02:59 And for the month of march, this is 46 ,000 units.

03:04 So these are the balances of ending inventory...

Question

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