Check my work Exercise 20-10 Manufacturing: Production budget LO P1 Blue Wave Co

Question

Check my work Exercise 20-10 Manufacturing: Production budget LO P1 Blue Wave Co. predicts the following unit sales for the coming four months: September, 3,000 units; October, 4,300 units; November, 6,700 units; and December, 8,100 units. The company's policy is to maintain finished goods inventory equal to 60% of the next month's sales. At the end of August, the company had 2,500 finished units on hand. Prepare a production budget for each of the months of September, October, and November. Blue Wave Co. Production Budget September, October and November September ber No er Next month's budgeted sales (units) Units to be proc Pre 2 of Next > E 8:33

Explanation / Answer

Blue Wave Co.

Production Budget

September, October and November

September October November Next month's budgeted sales (in units) 4,300 6,700 8,100 Ending inventory as a percentage of next month sales 60% 60% 60% Ending inventory in units 2,580 4,020 4,860 Sales in units 3,000 4,300 6,700 Total units needed 5,580 8,320 11,560 Less : Beginning inventory in units 2,500 2,580 4,020 Units to be produced 3,080 5,740 7,540

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