Quality Products, is a furniture manufacturer located at Paro.

The following are the

budgeted sales of the firm for the year 2023. 1st Quarter 150,000 units; 2nd Quarter
120,000 units; 3rd Quarter 90,000 units, 4th Quarter 70,000. The firm expects each unit
to be sold for Nu. 10. The management prefers to maintain a closing inventory of
finished goods equal to 8 per cent of next quarter's sales. The closing inventory of
finished goods at the end of the fourth quarter is estimated to be 15,000 units. The
opening inventory of finished goods of first quarter is 6,000 units.
Solution.
Sales Budget

4th
Details 1st Quarter 2nd Quarter 3rd Quarter Quarter Total

Budgeted Sales 150000 120000 90000 70000 430000

selling price 10 10 10 10 10

Total Sales Revenue 1500000 1200000 900000 700000 4300000

Production Budget

Details 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total

Sales 150000 120000 90000 70000 430000

add: Closing Stock 9600 7200 5600 15000 37400

Goods available for Sale 159600 127200 95600 85000 467400

less: Opening Stock 6000 9600 7200 5600 28400

Estimated Production 153600 117600 88400 79400 439000