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

	Sales in Units
April		70,000
May		85,000
June		110,000
July		90,000

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 15% of the following months sales. The inventory at the end of March was 10,500 units.

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.

Down Under Products, Ltd., Production Budget May April 70,000 85,000 Budgeted units sales 16,500 12,750 Add: Desired units of ending finished goods inventory Total needs 82,750 101,500 10,500 12,750 Less: Units of beginning finished goods inventory 72,250 88,750 Required production in units June 110,000 110,000 16,500 93,500 Quarter 265,000 265,000 10,500 254,500