All, Can you please assist with this accounting question? Production Budget Aqua
ID: 2408497 • Letter: A
Question
All,
Can you please assist with this accounting question?
Production Budget
Aqua-pro Inc. produces submersible water pumps for ponds and cisterns. The unit sales for selected months of the year are as follows:
Unit Sales
April
243,000
May
297,000
June
270,000
July
324,000
Company policy requires that ending inventories for each month be 25% of next month's sales. However, at the beginning of April, due to greater sales in March than anticipated, the beginning inventory of water pumps is only 21,000.
A production budget for the second quarter of the year. Show the number of units that should be produced each month as well as for the quarter in total.
Unit Sales
April
243,000
May
297,000
June
270,000
July
324,000
Explanation / Answer
Aqua-pro Inc.
Production budget
For the second quarter
74250
(297000*25%)
67500
(270000*25%)
81000
(324000*25%)
April may June total Sales 243000 297000 270000 810000 Add: desired ending inventory74250
(297000*25%)
67500
(270000*25%)
81000
(324000*25%)
81000 Total needs 317250 364500 351000 891000 Less: Beginning inventory 21000 74250 67500 21000 Units produced 296250 290250 283500 870000Related Questions
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