Down Under Products, Ltd, of Australia has budgeted sales of its popular boomera
ID: 2405522 • Letter: D
Question
Down Under Products, Ltd, of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May une uly Unit Sales 88,000 90,080 128,600 99,600 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 13,200 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 unitsExplanation / Answer
Down Under Products Ltd.
Production Budget
April
May
June
Quarter
Budgeted Units sales
88000
90000
128000
306000
Add: Closing inventory
13500
19200
14850
47550
Total Needs
101500
109200
142850
353550
Less: Opening Inventory
13200
13500
19200
45900
Required production in units
88300
95700
123650
307650
Down Under Products Ltd.
Production Budget
April
May
June
Quarter
Budgeted Units sales
88000
90000
128000
306000
Add: Closing inventory
13500
19200
14850
47550
Total Needs
101500
109200
142850
353550
Less: Opening Inventory
13200
13500
19200
45900
Required production in units
88300
95700
123650
307650
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