Lugo Company manufactures drinking glasses. One unit is a package of eight glasses, which sells for $25. Lugo projects sales for April will be 1,000 packages, with sales increasing by 100 packages per month for May, June, and July. On April 1, Lugo has 150 packages on hand but desires to maintain an ending inventory of 20% of the next month's sales. Prepare a sales budget and a production budget for Lugo for April, May, and June.

Begin by preparing a sales budget for April, May, and June. Lugo Company Sales Budget April, May, and June April May June Total Budgeted packages to be sold Sales price per package Total sales Now prepare a production budget for April, May, and June. Lugo Company Production Budget April, May, and June April May June Total Plus: Total packages needed Less: Budgeted packages to be produced