Exercise 8-2 (Algo) Production Budget [LO8-3] Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May June July Unit Sales 58,000 75,000 98,000 84,000 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 month's unit sales. The inventory at the end of March was 8,700 units. Required: Prepare a production budget by month and in total, for the second quarter. Down Under Products, Ltd., Production Budget April May June Quarter Budgeted units sales 58,000 75,000 98,000 Add: Desired units of ending finished goods inventory 11,250 14,700) 12.600 Total needs 69,250 89,700 110,600 0 Less: Units of beginning finished goods inventory Required production in units 8,700 11,250 14,700 60,550 78,450 95,900 0