Check my work 2 Down Under Products, Ltd., of Australia has budgeted sales of it

Question

Check my work 2 Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows April May Tune July Unit Sales 86,000 90,000 126,000 98,000 points eBook Hint Print 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 8,600 units. References Required: Prepare a production budget by month and in total, for the second quarter Down Under Products, Ltd. Production Budget April May June Quarter Budgeted units sales Total needs Required production in units

Explanation / Answer

Down Under Products, Ltd.,

Production Budget

*10% of the following month's sales in units

April May June Quarter Budgeted units sales 86,000 90,000 126,000 302,000 Add: Desired units of ending finished goods inventory* 9,000 12,600 9,800 9,800 Total needs 95,000 102,600 135,800 311,800 Less: Units of beginning finished goods inventory 8,600 9,000 12,600 8,600 Required production in units 86,400 93,600 123,200 303,200

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