The sales budget often uses the prior year’s sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. LearnCo has completed reviewing its prior year’s sales and has prepared the following sales budget. After reviewing LearnCo’s sales budget, you note that three numbers have been omitted. The company’s controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts. LearnCo Sales Budget For the Year Ending December 31, 20Y2 Product Unit Sales Volume Unit Selling Price Total Sales Basic Abacus   $7.00 $252,000 Deluxe Abacus     468,000 Totals 72,000   $720,000 The production budget should be integrated with the sales budget to ensure that production and sales are kept in balance during the year. The production budget estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels. You note that LearnCo has omitted six numbers from the following production budget and fill in the missing amounts. You may need to use numbers from the sales budget you prepared. LearnCo Production Budget For the Year Ending December 31, 20Y2   Units Basic Units Deluxe Expected units to be sold (from Sales Budget)     Desired ending inventory, December 31, 20Y2 1,000 3,000 Total units available     Estimated beginning inventory, January 1, 20Y2 (1,050) (2,100) Total units to be produced

Question
LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 20Y1, and is planning for 20Y2, its second year of operations, by preparing budgets from its master budget.
The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be. In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing a prediction of net income for 20Y2.
You have been asked to assist the controller of LearnCo in preparing the 20Y2 budgets.
 
The sales budget often uses the prior year’s sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. LearnCo has completed reviewing its prior year’s sales and has prepared the following sales budget.
After reviewing LearnCo’s sales budget, you note that three numbers have been omitted. The company’s controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts.
LearnCo
Sales Budget
For the Year Ending December 31, 20Y2
Product Unit Sales Volume Unit Selling Price Total Sales
Basic Abacus
 
$7.00 $252,000
Deluxe Abacus
 
 
468,000
Totals 72,000   $720,000
The production budget should be integrated with the sales budget to ensure that production and sales are kept in balance during the year. The production budget estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels.
You note that LearnCo has omitted six numbers from the following production budget and fill in the missing amounts. You may need to use numbers from the sales budget you prepared.
LearnCo
Production Budget
For the Year Ending December 31, 20Y2
  Units Basic Units Deluxe
Expected units to be sold (from Sales Budget)
 
 
Desired ending inventory, December 31, 20Y2 1,000 3,000
Total units available
 
 
Estimated beginning inventory, January 1, 20Y2 (1,050) (2,100)
Total units to be produced
 
 

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