apter 8 Saved Down Under Products, Ltd., ot Australia has budgeted sales of its

Question

apter 8 Saved Down Under Products, Ltd., ot Australia has budgeted sales of its popular boomerang for the next four months as follows April May June July 64,000 80,000 104,000 87,000 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 15% of the following month's unit sales. The inventory at the end of March was 9,600 units. Required: Prepare a production budget by month and in total, for the second quarter. Down Under Products, Ltd., Production Budget June Budgeted units sales Total needs Required production in units

Explanation / Answer

Production budget :

April May June Quarter Budgeted unit sales 64000 80000 104000 248000 Add:Desired ending inventory 12000 15600 13050 13050 Total needs 76000 95600 117050 261050 Less; Beginning inventory -9600 -12000 -15600 -9600 Required production in units 66400 83600 101450 251450

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