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Chapter_9_Assignment_Solution

Chapter_9_Assignment_Solution - Chapter 9 Solution...

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Chapter 9 Solution Keep-it-Hot Inc. manufactures popular thermoses. On June 30, the company expects to have 700 thermoses in inventory. Each thermos sells for $8.00. The company’s policy is to maintain a thermos inventory equal to 10% of next month’s sales. The company expects the following sales activity for July through November of this year: July ---------------- 7,000 units August ------------ 10,000 units September -------- 15,000 units October ----------- 9,000 units November -------- 12,000 units PROBLEM I : Prepare a sales budget for the third quarter of the year (July – Sept) showing the total dollar amount of sales. A total column is not necessary. July August September Estimated sales (units) 7,000 10,000 15,000 x Sales price per unit x $8.00 x $8.00 x $8.00 Total Budgeted Sales ($) $56,000 $80,000 $120,000 PROBLEM II: Prepare a production budget for the third quarter of the year. The third quarter months are shaded in gray. ( Note : Even though the third quarter budget is being prepared, go ahead and fill out the October and November columns as much as possible.) July August September October November Estimated sales (units) 7,000 10,000 15,000
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