Exercise 22-4 (Algo) Manufacturing: Production budget LO P1 Blue Wave Company budgets the following unit sales for the next four months: September, 3,000 units; October, 4,700 units; November, 7,000 units; and December, 8,500 units. The company's policy is to maintain finished goods inventory equal to 70% of the next month's unit sales. At the end of August, the company had 2,100 finished units in inventory. Prepare a production budget for each of the months of September, October, and November October 4,700 November 7,000 BLUE WAVE COMPANY Production Budget September Budgeted sales units 3,000 Add: Desired ending inventory Next period budgeted sales units 4,700 Ratio of inventory to future sales 70% Desired ending inventory units 3,290 Total required units Less: Beginning inventory units Units to produce 7,000 70 % 4,900 8,500 70 % 5,950