Help Save &Ei; Down Under Products, Ltd., of Australia has budgeted sales of its

Question

Help Save &Ei; Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows June July 64,000 80,000 104,000 87,000 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 15% of the following month's unit sales. The inventory at the end of March was 9,600 units Required Prepare a production budget by month and in total, for the second quarten Down Under Products, Ltd.. Production Budget April Budgeted units sales Total needs Reauired oroduction in units Prey 20f 9H1 Next >

Explanation / Answer

Production budget :

April May June Quarter Sales units 64000 80000 104000 248000 Add: Desired ending inventory 12000 15600 13050 13050 Total 76000 95600 117050 261050 Less: Beginning inventory -9600 -12000 -15600 -9600 Production units 66400 83600 101450 251450

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