Exercise 8-2 (Algo) Production Budget [LO8-3]

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

	Unit Sales
April	88,000
May	90,000
June	128,000
July	99,000

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 unit sales. The inventory at the end of March was 13,200 units.

Down Under Products, Limited, Production Budget Budgeted unit sales Add: Desired units of ending finished goods inventory Total needs Less: Units of beginning finished goods inventory Required production in units \begin{tabular}{|r|r|r|r|} \hline \multicolumn{1}{|c|}{ April } & \multicolumn{1}{|c|}{ May } & \multicolumn{1}{c|}{ June } & \multicolumn{1}{c|}{ Quarter } \\ \hline 88,000 & 90,000 & 128,000 & 306,000 \\ \hline & & & \\ \hline 88,000 & 90,000 & 128,000 & 306,000 \\ \hline & & & \\ \hline 88,000 & 90,000 & 128,000 & 30 \\ \hline \end{tabular}