Problem
Kessler Company manufactures drinking glasses. One unit is a package of eight glasses, which sells for $ 30. Kessler projects sales for April will be 1,500 packages, with sales increasing by 250 packages per month for May, June, and July. On April 1, Kessler has 300 packages on hand but desires to maintain an ending inventory of 20% of the next month's sales. Prepare a sales budget and a production budget for Kessler for April, May, June.
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Sales Budget for A, M, J
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April
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May
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June
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Total
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Budgeted packages to be sold
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1500
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1750
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2000
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5250
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Sales Price per package
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$30
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$30
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$30
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$30
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Total Sales
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$45,000
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$52,500
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$60,000
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$157,500
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Production Budget for A, M, J
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April
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May
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June
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Total
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Budgeted packages to be sold
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1500
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1750
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2000
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5250
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PLUS: Desired packages in Ending Inventory
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Total Packages needed
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LESS: Packages in Beginning Inventory
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300
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300
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Budgeted packages to be produced
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1800
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2050
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