Sunland, Inc., makes and sells drum sets. Nick Ross, controller, is responsible

Question

Sunland, Inc., makes and sells drum sets. Nick Ross, controller, is responsible for preparing the master budget. The sales manager has given Nick the following sales forecast for the coming months.

Sunland expects to have 4,846 drum sets in ending inventory on March 31. The company's policy is to carry 41% of the following month's projected sales in ending inventory.

Prepare Sunland's production budget for the second quarter. (Round answers to 0 decimal places, e.g. 5,275.)

April May June July Forecasted unit sales 11,820 14,380 8,690 9,600

Explanation / Answer

Prepare Sunland's production budget for the second quarter.

April May June Quarter Budgeted unit sales 11820 14380 8690 34890 Add: Desired ending inventory 5896 3563 3936 3936 Total needs 17716 17943 12626 38826 Less ;Beginning inventory (4846) (5896) (3563) (4846) Production units 12870 12047 9063 33980

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