1. Master Budgets
Chapter 22
Exercises

2. Operating Budgets In-Class Exercise (Form groups and work exercise):
Exercise No Page
E Sales & Production Budgets
(Use the format, as reflected on the next slide, to begin this exercise)

3. Sales Budget

4. Sales Budget Exercise E22-24:
Use the following information to prepare a sales and a production budget for the months of April, May, and June. (a) Gorman Company manufactures drinking glasses. (b) One unit is a package of 8 glasses. (c) Each package of glasses sell for $35. (d) Projected sales for April will be 5,500 packages, with sales increasing by 450 packages per month for May, June, and July. (e) On April 1, Gorman has 125 packages on hand, but desires to maintain an ending inventory of 10% of the next month’s sales.

5. Sales Budget

6. Operating Budgets Production Budget
(Use the format, as reflected on the next chart, to work this part of the exercise)

7. Production Budget
Data from Part 1

8. 10% of next month’s sales (5,950 x 10% = 595)
Production Budget
10% of next month’s sales (5,950 x 10% = 595)

9. Production Budget

10. Production Budget

11. Production Budget

12. Production Budget
End of Exercise