On January 1, 2020, the Carla Vista Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2020.

Sales units: First quarter 5,500; second quarter 6,600; third quarter 7,300.
Ending raw materials inventory: 40% of the next quarter’s production requirements.
Ending finished goods inventory: 25% of the next quarter’s expected sales units.
Third-quarter production: 7,740 units.

The ending raw materials and finished goods inventories at December 31, 2019, follow the same percentage relationships to production and sales that occur in 2020. 5 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $5 per pound.
Prepare a production budget by quarters for the 6-month period ended June 30, 2020

Answer and Explanation:

The preparation of production budget is shown below:-

                               Carla Vista Company

                               Production budget

                         For 6 months Ending June 31

                                      Quarter 1         Quarter 2      Six months

Expected unit sales      5,500               6,600

Add: Desired ending finished

goods unit                     1,650                1,825

                                (6,600 × 25%)  (7,300 × 25%)

Total required units     7,150                  8,425

Less: beginning finished

goods unit                    1,375                  1,650

                             (5,500 × 25%)    (6,600 × 25%)

Required production

units                              275                     6,775            7,050

answer; ///blank(1); rate-buster; blank(2) systematic soldiering;

answer; /// blank(1); above; blank(2); less;