Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells…

Assume that Stillwater Designs produces two automotive subwoofers

Production Budget

Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5. The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers) for the coming five quarters are as follows:

S12L7 S12L5
First quarter, 20Y1 1,120 1,820
Second quarter, 20Y1 3,080 1,960
Third quarter, 20Y1 7,840 7,420
Fourth quarter, 20Y1 6,440 5,460
First quarter, 20Y2 1,260 1,680

The vice president of sales believes that the projected sales are realistic and can be achieved by the company.

Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to manufacturers located in Asia). Beginning inventory of S12L7 for the first quarter of 20Y1 was 340 boxes. The company’s policy is to have 20% of the next quarter’s sales of S12L7 in ending inventory. Beginning inventory of S12L5 was 170 boxes. The company’s policy is to have 30% of the next quarter’s sales of S12L5 in ending inventory.

Required:

Prepare a production budget for each quarter for 20Y1 and for the year in total.

Stillwater Designs
Production Budget for S12L7
For the Year Ended December 31, 20Y1
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year
Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced

Prepare a production budget for each quarter for 20Y1 and for the year in total. If required, round your answers to the nearest whole value.

Stillwater Designs
Production Budget for S12L5
For the Year Ended December 31, 20Y1
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year
Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced

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