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Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the...

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Question

Accounting

Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows:

Unit Sales
April 78,000
May 85,000
June 118,000
July 94,000

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 20% of the following months unit sales. The inventory at the end of March was 15,600 units.

Required:

Prepare a production budget by month and in total, for the second quarter.

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