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

Question

Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

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 20% 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.

Unit Sales April 66,000 May 80,000 June 106,000 July 88,000 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 0 0 0 0 Required production in units 0 0 0 0

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars April May June Quarter July Budgeted Unit Sales            66,000.00            80,000.00          106,000.00          252,000.00            88,000.00 Ending inventory = 20%*next month sales            16,000.00            21,200.00            17,600.00            17,600.00 Total needs = Sales+Ending            82,000.00          101,200.00          123,600.00          269,600.00 Less Beginning Inventory=Ending of prev month            13,200.00            16,000.00            21,200.00            13,200.00 Required production in Units = Needs - beginning            68,800.00            85,200.00          102,400.00          256,400.00

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