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

Question

3.Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Sales
in Units
April 50,000
May 75,000
June 90,000
July 80,000

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 10% of the following month's sales. The inventory at the end of March was 5,000 units.

Required:
Show the number of units to be produced each month and for the quarter in total.

Required
Production
April
May
June
Quarter

Explanation / Answer

production in april =90% * 50000+10%*75000=52500 production in may=90% *75000+10%*90000=76500 production in june=90%*90000+10%*80000=89000 production of quarter=52500+76500+89000=218000

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