Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the...
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Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May June July Unit Sales 80,000 90,000 120,000 95,000 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 unit sales. The inventory at the end of March was 8,000 units. Required: Prepare a production budget by month and in total, for the second quarter. X Answer is complete but not entirely correct. May June Quarter 90,000 120,000 290,000 Down Under Products, Ltd., Production Budget April Budgeted unit sales 80,000 Add: Desired units of ending finished goods 9,000 inventory Total needs 89,000 Less: Units of beginning finished goods inventory 8,000 Required production in units 81,000 12,000 9,500 30,500 102,000 129,500 320,500 9,000 12,000 117,500 29,000 291,500 93,000
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