Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40,and the standard sells for $10. Projected sales of the two models for the coming four quartersare given below. Deluxe StandardFirst quarter 12,000 90,000Second quarter 14,300 88,400Third quarter 16,600 92,000Fourth quarter 20,000 91,600 The president of the company believes that the projected sales are realistic and can beachieved by the company. In the factory, the production supervisor has received the projectedsales figures and gathered information needed to compile production budgets. He found that1,300 deluxes and 1,170 standards were in inventory on January 1. Company policy dictates thatending inventory should equal 20 percent of the next quarter’s sales for deluxes and 10 percentof next quarter’s sales for standards.Required:1. Prepare a sales budget for each quarter and for the year in total. Show sales by product andin total for each time period.2. What factors might Berring Company have considered in preparing the sales budget?3. Prepare a separate production budget for each product for each of the first three quarters ofthe year.

Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40,
and the standard sells for $10. Projected sales of the two models for the coming four quarters
are given below.

Deluxe Standard
First quarter 12,000 90,000
Second quarter 14,300 88,400
Third quarter 16,600 92,000
Fourth quarter 20,000 91,600

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
1,300 deluxes and 1,170 standards were in inventory on January 1. Company policy dictates that
ending inventory should equal 20 percent of the next quarter’s sales for deluxes and 10 percent
of next quarter’s sales for standards.
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. What factors might Berring Company have considered in preparing the sales budget?
3. Prepare a separate production budget for each product for each of the first three quarters of
the year.