Exercise 7-2 Production Budget ILO7-3 Down Under Products, Ltd., of Australia ha

Question

Exercise 7-2 Production Budget ILO7-3 Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May June July Sales in Units 66,000 80,000 106,000 88,000 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 sales. The inventory at the end of March was 13,200 units Required: Prepare a production budget for the second quarter, in your budget, show the number of units to be produced each month and for the quarter in total Down Under Products, Ltd., Production Budget April May June Quarter Budgeted units sales Total needs Required production in units

Explanation / Answer

April May June Quarter Budgeted units sales 66000 80000 106000 252000 Add: Desired units of ending finished goods inventory 16000 21200 17600 17600 Total needs 82000 101200 123600 269600 Less: Units of beginning finished goods inventory 13200 16000 21200 13200 Required production in units 68800 85200 102400 256400

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.