Question

Preparing a Production Budget Patrick Inc. makes industrial solvents. In the first 4 months of the...

Preparing a Production Budget

Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales:

January 41,000
February 38,000
March 50,000
April 51,000

Patrick's policy is to have 24% of next month's sales in ending inventory. On January 1, it is expected that there will be 4,600 drums of solvent on hand.

Required:

Prepare a production budget for the first quarter of the year. Show the number of drums that should be produced each month as well as for the quarter in total. If required, round your answers to the nearest whole unit.

Patrick Inc.
Production Budget
For the Coming Quarter
Business   Accounting   
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Homework Answers

Answer #1
  • Requirement

Patrick Inc.

Production Budget

For the Coming Quarter

January

February

March

1st Quarter Total

Sales

41000

38000

50000

129000

Desired ending inventory

9120

12000

12240

12240

Total needs

50120

50000

62240

141240

Less: Beginning inventory

4600

9120

12000

4600

Units to be produced

45520

40880

50240

136640

--Working

Patrick Inc.

Production Budget

For the Coming Quarter

January

February

March

1st Quarter Total

Sales

41000

38000

50000

129000

Desired ending inventory

=38000*24%

=50000*24%

=51000*24%

12240

Total needs

50120

50000

62240

141240

50000

62240

141240

Less: Beginning inventory

4600

=38000*24%

=50000*24%

4600

Units to be produced

45520

40880

50240

136640

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