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Prepare a sales budget for each quarter

    Assignment Instructions

    Assignment ID: FG133135366

    Question – Archer Company produces two products: the custom and the basic. The custom sells for $30, and the basic sells for $8. Projected sales of the two models for the coming four quarters are given below.

    Custom

    Basic

    First quarter

    12,000

    90,000

    Second quarter

    14,500

    88,200

    Third quarter

    16,500

    92,000

    Fourth quarter

    20,000

    91,800

    The president of the company believes that the projected sales are realistic and can be achieved by the company. In the factory, the production supervisor has received the projected sales figures and gathered information needed to compile production budgets. He found that 800 customs and 1,140 basics were in inventory on January 1. Company policy dictates that ending inventory should equal 20 percent of the next quarter’s sales for customs and 10 percent of next quarter’s sales for basics.

    Required –

    1. Prepare a sales budget for each quarter and for the year in total. Show sales by product and in total for each time period.

    2. Prepare a separate production budget for each product for each of the first three quarters of the year.

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