Year 2 Quarter Year 3 Quarter 1 70,000 Data 1 3 4 2 Budgeted unit sales 40,000 60,000 100,000 50,000 80,000 • Selling price per unit • Accounts receivable, beginning balance • Sales collected in the quarter sales are made • Sales collected in the quarter after sales are made • Desired ending finished goods inventory is • Finished goods inventory, beginning • Raw materials required to produce one unit • Desired ending inventory of raw materials is • Raw materials inventory, beginning • Raw material costs • Raw materials purchases are paid and • Accounts payable for raw materials, beginning balance $12 per unit $65,000 75% 25% 30% of the budgeted unit sales of the next quarter 12,000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase $81,500 $15 per hour 0.2 hour per unit •Direct labor cost per hour •Direct labor hour per unit •Variable MOH rate •Total fixed MOH $2 per hour $60,000 •Variable S&A expense rate $1.80 per unit $50,000 12% •Minimum cash balance •Annual Interest rate

The production required for a month is equal to the sales expected in the month plus any closing inventory, if required, less opening inventory. Opening inventory of a month is equal to closing inventory of previous month.Production Budget: Year 2 Quarter Year 3 Quarter 1 2 3 4 Year 1 2 Budget Unit Sales 40,000 60,000 100,000 50,000 250,000 70,000 80,000 Desired finished goods inventory 18,000 30,000 15,000 21,000 21,000 24,000 Total needs 58,000 90,000 115,000 71,000 271,000 94,000 Less: Beginning inventory 12,000 18,000 30,000 15,000 12,000 21,000 Required Production 46,000 72,000 85,000 56,000 259,000 73,000 Desired finished goods inventory is calculated by:= 30% * Budgeted unit sales of next quarter Ending inventory for year will be same as ending inventory for quarter 4. Similarly, beginning inventory for year will be equal to beginning inventory of quarter 1.