Question: 9-2 Down Under Products, Ltd., of Australia has bu…
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
| Sales in Units | |||
| April | 62,000 | ||
| May | 80,000 | ||
| June | 102,000 | ||
| July | 86,000 | ||
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 sales. The inventory at the end of March was 6,200 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 unit sales | ||||
| Total needs | ||||
| Required production in units | ||||
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