Question #2 Exercise 8-2 Production Budget [LO8-3 Down Under Products, Ltd., of

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Question #2 Exercise 8-2 Production Budget [LO8-3 Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May June July Sales in Units 58,000 75,000 98,000 84,000 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 15% of the following month's sales. The inventory at the end of March was 8,700 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 58,000 75,000 98,000 231,000 Budgeted units sales Add: Desired units of ending finished goods inventory Total needs Less: Units of beginning finished goods inventory Required production in units 58,000 75,000 98,000 231,000 58,000 75,000 98,000 231,000

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Question 1.

Question 2 .

Down Under Products,Ltd Production budget April may June Quarter Budgeted unit sales 58000 75000 98000 231000 Add Desired units of ending finished goods inventory 11250 14700 12600 38550 Total Needs 69250 89700 110600 269550 less. Units of beginning finished goods inventory 8700 11250 14700 34650 Required Production in Unts 77950 100950 125300 304200

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