1. Mikes bike shop has asked you to prepare a sales budget and production budget for the first quarter of the year using the following information:
   • Selling price of custom bike: $800
   • Expecting to sell 200 bikes in January and a 10% increase in each month for the next 6 months
   • The required ending inventory is 20% of next months sales.

Sales Budget

For the Quarter Ended March 31, 2021

	January	February	March	Total
Expected Sales (Units)
Selling Price per Bike
Total Sales Revenue

Production budget using same information

	January	February	March
Expected Sales (Units)
Desired Ending Inventory (Units)
Total Required Units
Less: Beginning Inventory
Required Production