Desired ending inventory units

1 Exercise 20-3 (Static) Manufacturing: Production budget LO P1 6.25 points Ruiz Company provides the following budgeted sales for the next four months. The company wants to end each month with ending finished goods inventory equal to 25% of next month's budgeted unit sales. Finished goods inventory on April 1 is 125 units. Prepare a production budget for the months of April, May, and June. April 500 May 580 June July 620 Budgeted sales units 540 Answer is complete but not entirely correct. RUIZ COMPANY Production Budget April 500 May 580 June 540 580 540 620 25% 25% Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Less: Beginning inventory units Units to produce 125 x 25% 145 X 715 (145) 0 645 (125) 135 X 695 (135) 560 Solo 520 570