Wayans Company produces and sells automobile batteries, including the heavy-duty HD-240. The 2020 sales budget is as follows:
Quarter Units of HD-240 1 6,600 2 6,800 3 8,400 4 9,500 The January 1, 2020, inventory of HD-240 is 1,500 units. Management wants an ending inventory each quarter that is equal to 30% of the next quarter’s sales. It expects sales in the first quarter of 2021 to be 20% higher than sales in the same quarter in 2020.
Prepare quarterly production budgets for each quarter for 2020.
WAYANS COMPANY
Production Budget—Product HD-240
For the Year Ending December 31, 2020
Quarter 1 2 3 4 Year Cost of SalesUnit SalesTotal RequiredEnding InventoryBeginning Inventory AddLess: Total RequiredCost of SalesBeginning InventoryEnding InventoryUnit Sales Beginning InventoryEnding InventoryUnit SalesCost of SalesTotal Required AddLess: Total RequiredCost of SalesBeginning InventoryUnit SalesEnding Inventory Total