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Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next...

Question:

Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows 1 Uni
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows 1 Unit Sales 74,000 April Кay June 85,000 114,000 July 92,000 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 10% of the following month's unit sales. The inventory at the end of March was 7,400 units. Required: Prepare a production budget by month and in total, for the second quarter. Down Under Products, Ltd. Production Budget Quarter June Аpril May Budgeled unit sales 0 Total needs 0 0 Required production in units

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Answer:

Down Under Products Ltd.
Production Budget
April May June Quarter
Budgeted unit sales         74,000        85,000       1,14,000       2,73,000
Add:Ending inventory (85,000*10%)           8,500 (114,000*10%)        11,400 (92,000*10%)            9,200          29,100
Total needs         82,500        96,400       1,23,200       3,02,100
less:Beginning inventory           7,400          8,500          11,400          27,300
Required production in units         75,100        87,900       1,11,800       2,74,800
.

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