Down Under Products, Ltd., of Australia has budgeted sales of its popular boomer
ID: 2343005 • Letter: D
Question
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: Apri May June Unit Sales 54,000 75,000 4,000 82,000 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. Down Under Products, Ltd., Production Budget April May June Quarter Budgeted units sales Total needs Required production in units Hints Hint 1Explanation / Answer
Down Under Products Ltd.
Production Budget
April
May
June
Quarter
Budgeted unit sales
54,000.00
75,000.00
94,000.00
223,000.00
Ending inventory
(75,000*20%)
15,000.00
(94,000*20%)
18,800.00
(82,000*20%)
16,400.00
16,400.00
Total needs
69,000.00
93,800.00
110,400.00
239,400.00
Beginning inventory
10,800.00
15,000.00
18,800.00
10,800.00
Required production in units
58,200.00
78,800.00
91,600.00
228,600.00
Down Under Products Ltd.
Production Budget
April
May
June
Quarter
Budgeted unit sales
54,000.00
75,000.00
94,000.00
223,000.00
Ending inventory
(75,000*20%)
15,000.00
(94,000*20%)
18,800.00
(82,000*20%)
16,400.00
16,400.00
Total needs
69,000.00
93,800.00
110,400.00
239,400.00
Beginning inventory
10,800.00
15,000.00
18,800.00
10,800.00
Required production in units
58,200.00
78,800.00
91,600.00
228,600.00
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