ACCOUNTING 118 Palermo Company estimates that unit sales will be 10,700 in quarter

Palermo Company estimates that unit sales will be 10,700 in quarter 1; 12,400 in quarter 2; 14,900 in quarter 3; and 18,800 in quarter 4. Management desires to have an ending finished goods inventory equal to 22% of the next quarter’s expected unit sales.Prepare a production budget by quarters for the first 6 months of 2014.PALERMO COMPANYProduction BudgetFor the Six Months Ending June 30, 2014Quarter12Six Months Beginning Finished Goods InventoryBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods InventoryDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units AddLess: Beginning Finished Goods InventoryBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods InventoryDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units Beginning Finished Goods InventoryBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods InventoryDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units AddLess: Beginning Finished Goods InventoryBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods InventoryDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units Beginning Finished Goods InventoryBeginning Direct MaterialsDesired Ending Direct MaterialsDesired Ending Finished Goods InventoryDirect Materials Per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials RequiredTotal Required Units