Exercise 8-2

Production Budget Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: 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 month's unit sales. The inventory at the end of March was 5,000 units. Required: Using Schedule 2 as your guide, prepare a production budget by month and in total, for the second quarter