This Problem Can Be Broken into Components…

question 99

Essay

This problem can be broken into components…
a. Given the following information, prepare a quarterly sales budget and production budget, in units:
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 4^th quarter. 40 percent of the sales occur in the 4^th quarter and the remaining units are sold equally over the other three quarters.
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 is the estimated costs of production?
Materials: Each unit requires 1 yard of fabric and 1/2 pound of fiberfill stuffing. Fabric can be purchased at $9.00 per yard and fiberfill sells for $4.00 per pound. Inventories of materials are listed as follows:

Beginning inventory of fabric is 16,000 yards and 6,000 lbs of fiberfill.
It takes an estimated time of .25 hours to produce one unit of output. The labor cost per hour is $25 per hour and the taxes and benefit load is 25 percent.

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