19 Jan

Down Under Products, Ltd., of Australia has budgeted sales

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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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