5.1 Sales and Production BudgetsBerring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and the standard sells for $10. Projectedsales of the two models for the coming four quarters are given below.DeluxeStandardFirst quarter11,00090,000Second quarter14,20088,200Third quarter16,50093,000Fourth quarter20,00091,400The president of the company believes that the projected sales are realistic and can be achieved by the company. In the factory, theproduction supervisor has received the projected sales figures and gathered information needed to compile production budgets. He foundthat 1,300 deluxes and 1,170 standards were in inventory on January 1. Company policy dictates that ending inventory should equal 20percent of the next quarter's sales for deluxes and 10 percent of next quarter's sales for standards. Required:1. Prepare a sales budget for each quarter and for the year in total. Show sales by product and in total for each time period.Berring CompanySales BudgetFor the Year Ended December 31Quarter 1Quarter 2Quarter 3 Quarter 4YearDeluxe:UnitsUnit priceSalesStandard:UnitsUnit priceSalesTotal Sales100000000000

The sales budget is prepared at the beginning of the period that shows the sales units that take…

Answered: First quarter Second quarter Third…

First quarter Second quarter Third quarter Fourth quarter Deluxe Standard 11,000 90,000 14,200 88,200 16,500 93,000 20,000 91,400

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 16E

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Question

5.1

Sales and Production Budgets
Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and the standard sells for $10. Projected
sales of the two models for the coming four quarters are given below.
Deluxe
Standard
First quarter
11,000
90,000
Second quarter
14,200
88,200
Third quarter
16,500
93,000
Fourth quarter
20,000
91,400
The president of the company believes that the projected sales are realistic and can be achieved by the company. In the factory, the
production supervisor has received the projected sales figures and gathered information needed to compile production budgets. He found
that 1,300 deluxes and 1,170 standards were in inventory on January 1. Company policy dictates that ending inventory should equal 20
percent of the next quarter's sales for deluxes and 10 percent of next quarter's sales for standards.

Required:
1. Prepare a sales budget for each quarter and for the year in total. Show sales by product and in total for each time period.
Berring Company
Sales Budget
For the Year Ended December 31
Quarter 1
Quarter 2
Quarter 3 Quarter 4
Year
Deluxe:
Units
Unit price
Sales
Standard:
Units
Unit price
Sales
Total Sales
10000
0000000

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