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1. Production Budget (LO -9-3)

   Chrystal Telecom has budgeted the sales of its innovative mobile phone over the next four months as follows:

   Sales in Units

   July30,000

   August.45,000

   September..60,000

   October.50,000

   The company is now in the process of preparing a production budget for the third quarter. Past experience has shown that end-of-month finished goods inventories must equal 10% of the next months sales. The inventory at the end of Jun was 3,000 units.

   Required:

   Prepare a production budget for the third quarter showing the number of units to be produced each month and for the quarter in total.