Answer Happy

> DO IT! Soriano Company is preparing its master budget for 2014. Relevant data pertaining to its sales, production, and direct materials budgets are as follows: Sales: Sales for the year are expected to total 1,200,000 units. Quarterly sales are 20%, 25%, 30%, and 25% respectively. The sales price is expected to be $50 per unit for the first three quarters and $55 per unit beginning in the fourth quarter. Sales in the first quarter of 2015 are expected to be 10% higher than the budgeted sales for the first quarter of 2014. Production: Management desires to maintain ending finished goods inventories at 25% of next quarter's budgeted sales volume. Direct materials: Each unit requires 3 pounds of raw materials at a cost of $5 per pound. Management desires to maintain raw materials inventories at 5% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2015 are 810,000 pounds. LO 3 > DO IT! Prepare the sales, production, and direct materials budgets by quarters for 2014. B D SORIANO COMPANY Sales Budget For the Year Ending December 31, 2014 Quarter 1 2 3 4 5 4 Year 6 7 B 9:35 LO 3 Identify the budgets that comprise the master budget.