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1 April May June July Unit Sales 54,000 75,000 94,000 82,000 5 points The company is now in the process of preparing a production budget

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1 April May June July Unit Sales 54,000 75,000 94,000 82,000 5 points 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 month's unit sales. The inventory at the end of March was 10,800 units. Required: Prepare a production budget by month and in total, for the second quarter. X Answer is complete but not entirely correct. Down Under Products, Ltd., Production Budget April Budgeted unit sales 54,000 Add: Desired units of ending finished goods inventory 15,000 Total needs 69,000 Less: Units of beginning finished goods inventory (10,800) Required production in units 58,200 May 75,000 18,800 June 94,000 16,400 110,400 (18,800) 91,600 Quarter 223,000 50,200 X 273,200 (44,600) X 228,600 93,800 (15,000) 78,800

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