Down Under Products, Ltd., of Australia, has budgeted sales of its popular boomerang for the next four months as follows:

	Sales in Units
April	50,000
May	75,000
June	90,000
July	80,000

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 10% of the following months sales. The inventory at the end of March was 5,000 units. (Australias currency is the Australian dollar.)

Required:

Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.

From past experience, the company has learned that 25% of a months sales are collected in the month of sale, another 65% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totalled $380,000, and March sales totalled $360,000.

Required:

Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

Down Under Products, Ltd.
Production Budget
	April	May	June	Quarter
Budgeted sales in units........................................
Add desired ending inventory*...........................
Total needs............................................................
Less beginning inventory.....................................
Required production.............................................

*10% of the following months sales in units

Down Under Products, Ltd., of Australia, has budgeted sales of its popular boomerang for the next four months as follows:

	Sales in Units
April	50,000
May	75,000
June	90,000
July	80,000

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 10% of the following months sales. The inventory at the end of March was 5,000 units. (Australias currency is the Australian dollar.)

Required:

Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.

From past experience, the company has learned that 25% of a months sales are collected in the month of sale, another 65% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totalled $380,000, and March sales totalled $360,000.

Required:

Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

Down Under Products, Ltd.
Production Budget
	April	May	June	Quarter
Budgeted sales in units........................................
Add desired ending inventory*...........................
Total needs............................................................
Less beginning inventory.....................................
Required production.............................................

*10% of the following months sales in units