Thank you! Please show all work. Sugar has forecast sales for the next three mon

Question

Thank you! Please show all work.

Sugar has forecast sales for the next three months as follows: July 4,000 units, August 6,000 units, September 7,500 units, and October 8,000 units. Sugar's policy is to have an ending inventory of 40% of the next month's sales needs on hand. July 1 inventory is projected to be 1,500 units. Manufacturing overhead is budgeted to be $17,000 plus $5 per unit produced. Prepare a production budget for Sugar for as many months as is possible. Prepare a manufacturing overhead budget for the three months July - September. Be sure to include a total for the quarter as well.

Explanation / Answer

Solution:

a.

b.

Prodcution Budget July August September Total Forecasted Sales 4,000 6,000 7,500 17,500 Add: Ending units - 40 % of next month's sales 2400 3000 3200 8,600 Less: Beginning units 1,500 2400 3000 6,900 Units to be produced 4,900 6,600 7,700 19,200

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