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

Question

Down Under Products, Ltd, of Australia has budgeted sales of its popular boomerang for the next four months as follows April May June July 88,000 90,000 128,000 99,000 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 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 O Type here to search om' ee@

Explanation / Answer

The following is the production budget :

April may june quarter budgeted unit sales 88,000 90,000 128,000 306,000 add: closing stock (15% *90,000 , 128,000 , 99,000) 13,500 19,200 14,850 14,850 total needs 101,500 109,200 142,850 320,850 less:opening stock (previous month closing stock) -13,200 -13,500 -19,200 -13,200 required production in units 88,300 95,700 123,650 307,650

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