Exercise 8-2 Production Budget [LO8-3]

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

	Sales in Units
April		72,000
May		85,000
June		112,000
July		91,000

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 20% of the following months sales. The inventory at the end of March was 14,400 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
	April	May	June	Quarter
Budgeted units sales
Total needs	0	0	0	0
Required production in units	0	0	0	0