10 Down Under Products, Ltd, of Australia has budgeted sales of its popular boom

Question

10 Down Under Products, Ltd, of Australia has budgeted sales of its popular boomerang for the next four months as follows: April 54,800 75,880 94,080 82,080 151 points Duly The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of month inventory levels must equal 20% of the following month's unit sales. The inventory at the end of March was 10,800 units. Required Prepare a production budget by month and in total, for the second quarter Ltd. rter April

Explanation / Answer

Down Under Products, Ltd Production Budget April May June Quarter Budgeted unit sales 54000 75000 94000 223000 Ending Inventory 15000 18800 16400 16400 Total Needs 69000 93800 110400 239400 Less : Opening inventory unit 10800 15000 18800 18800 Required production in units 58200 78800 91600 228600 Ending inventory 75000*20% 94000*20% 82000*20%

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