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Question - Crane Company produces and sells automobile batteries, the heavy-duty HUI-240. The 2020 sales forecast is as follows.
Quarter
HD-240
1
5,100
2
7,410
3
8,180
4
10,470
The January 1, 2020, inventory of HD-240 is 2,040 units. Management desires an ending inventory each quarter equal to 40% of the next quarter's sales. Sales in the ?rst quarter of 2021 are expected to be 25% higher than sales in the same quarter in 2020.
Prepare quarterly production budgets for each quarter and in total for 2020.
Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.
Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes
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