Prepare a 2012 production budget for K's Toys car production
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Prepare a 2012 production budget that meets the sales expectations. K's will begin January with no inventory for any product. It needs to be broken down by machine so that Stan and Kyle know what each of them needs to make on their machines. K's prefers to have all of the production completed the month before the products are to be sold and shipped; so all of the sales for May should be working hours of December to meet the needs of the distributors of the small car, ball, and the bat. The large cars must be ready on the production budget that approaches maximizing profit or cash flow. Explain the basic guidelines you used to arrive at your decisions.
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The solution prepares a 2012 production budget for K`s Toys car production.
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K's Toys Inc.
Beginning of year budgeting and planning
K's Toys Inc. is a small manufacturer that makes toys for sale to distributors who then resells them in national chain stores. They sell to only a few distributors and that tends to make the sales irregular with larger sales during the summer and at Christmas, and very few sales during the rest of the year.
They have a limited product line that includes: small car, large car, plastic bat and plastic ball.
The estimated sales for each product is as follows
Year month small car large car bat ball
2011 11 3,000 400 500 1,800
2011 12 900 100 50 0
2012 1 0 0 0 0
2012 2 0 0 0 0
2012 3 0 0 0 0
2012 4 0 0 0 0
2012 5 0 250 500 1500
2012 6 500 200 200 1500
2012 7 1000 100 200 1000
2012 8 750 50 700 0
2012 9 250 0 200 0
2012 10 0 0 100 0
2012 11 4000 600 1000 2000
2012 12 1500 200 100 0
2013 1 0 0 0 0
2013 2 0 0 0 0
The estimated sales amounts per unit are:
Small car $21 per unit
Large Car $150 per unit
Bat $25 per unit
Ball $10 per unit
Standard Material Quantities for each product.
Small Car
5 ounces of plastic
2 ounces of black paint
Small box
Large Car
3 pounds of plastic
3 ounces of black paint
4 ounces of red paint
2 metal axels
1 hood ornament
4 large plastic wheels (made by K's toys)
Large box
Plastic bat
12 ounces of plastic
2 ounces of white paint
No packaging
Plastic ball
4 ounces of plastic
2 ounces of white paint
No packaging
Large plastic wheel (needed for large car)
3 ounces of plastic
1 ounce of black paint
Standard material costs for each product are as follows.
Plastic $.050 ...
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