Down Under Products Ltd of Australia has budgeted sales of i

Down Under Products, Ltd, of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May une uly Unit Sales 88,000 90,080 128,600 99,600 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 unit sales. The inventory at the end of March was 13,200 units. 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

Solution

Down Under Products Ltd.

Production Budget

April

May

June

Quarter

Budgeted Units sales

88000

90000

128000

306000

Add: Closing inventory

13500

19200

14850

47550

Total Needs

101500

109200

142850

353550

Less: Opening Inventory

13200

13500

19200

45900

Required production in units

88300

95700

123650

307650

Down Under Products Ltd.
Production Budget
	April	May	June	Quarter
Budgeted Units sales	88000	90000	128000	306000
Add: Closing inventory	13500	19200	14850	47550
Total Needs	101500	109200	142850	353550
Less: Opening Inventory	13200	13500	19200	45900
Required production in units	88300	95700	123650	307650