Cane Company has budgeted the sales of its innovative mobile phone over the next
ID: 2418271 • Letter: C
Question
Cane Company has budgeted the sales of its innovative mobile phone over the next four months as follows:
Sales in Units
Jan………………………………………………………………………30,000
feb………………………………………………………………….45,000
march…………………………………………………………..60,000
april……………………………………………………………….50,000
The company is now in the process of preparing a production budget for the third quarter. Past experience has shown that end-of-month finished goods inventories must equal 10% of the next month’s sales. The inventory at the end of december was 3,000 units.
Prepare a production budget for the third quarter showing the number of units to be produced each month and for the quarter in total.
Sales in Units
Jan………………………………………………………………………30,000
feb………………………………………………………………….45,000
march…………………………………………………………..60,000
april……………………………………………………………….50,000
Explanation / Answer
Production Budget Months Particulrs Jan Feb Mar Sales 30000 45000 60000 (+) Inventory at the end 4500 6000 5000 (-) Inventory at the beginning 3000 4500 6000 Production per month 31500 46500 59000 Production for the quarter 137000
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