This Problem Can Be Broken into Components I Beginning Inventory of Fabric Is 16,000 Metres And Following

question 74

Essay

This problem can be broken into components.
a.Given the following information,prepare a quarterly sales budget and production budget,in units:
i.Last year sales = 500,000 units.The organization is planning a 10 percent increase in sales for the year 2012.The company is a retail organization that sees higher sales due to the holidays in the fourth quarter.40 percent of the sales occur in the fourth quarter and the remaining units are sold equally over the other three quarters.
ii.The beginning inventory for the year amounts to 20,000 units.The estimated sales for the first quarter of 2013 amount to 115,000 units.The company requires an ending inventory of 20 percent of the next quarters' sales.
b.Given the schedules above,if the projected sales price is $50 per unit,what is the expected revenue per quarter? Also,given the following information,what are the estimated costs of production?
Materials:
Each unit requires 1 metre of fabric and 1/2 kilogram of fibrefill stuffing.Fabric can be purchased at $9.00 per metre and fibrefill sells for $4.00 per kg.Inventories of materials are listed as follows:
$$\begin{array} { l r r r r } & \text { Qtr1 } & \text { Qtr2 } & \text { Qtr3 } & \text { Qtr4 } \\\text { Fabric/m } & 17,000 & 20,000 & 18,000 & 19,000 \\\text { Fibrefill/kg } & 5,000 & 6,700 & 8,000 & 8,500\end{array}$$
i. Beginning inventory of fabric is 16,000 metres and $6,000 \mathrm{~kg}$ of fibrefill.
ii. It takes an estimated time of 25 hours to produce one unit of output. The labour cost per hour is $\$ 25$ per hour and the taxes and benefit load is 25 percent.

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