Revised Production Budget. By mid-September, the sales manager of Pillai Supplies, Inc. realized that the original forecast for the fourth quarter would have to be revised. The original and revised forecasts appear as follows:

Normally, 200 units can be produced in one hour of machine time. An inventory equal to 20 percent of next month’s estimated sales should be on hand at the end of each month, and the company plans to have 32,000 units in inventory on September 30.
Required (Use of spreadsheet software is recommended.):
1. Prepare production and machine-hour budgets for the three months of the fourth quarter using the original sales forecast.
2. Revise the production and machine-hour budgets for Part (1) using the revised forecast.
3. How many hours of production machine time can be released each month for other work because of the expected reduction in sales?

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Original Forecast Revised Forecast October November 160,000 units 220,000 150,000 units 200,000 December 270,000 230,000 January 300,000 240,000