Pacesetters, Inc. had actual sales in units for the 4th quarter of last year as follows:

Month Unit sales

October 6,800

November 5,600

December 6,100

Unit sales are expected to increase 25% in the 4^th quarter of next year. The sales price per unit will be $150.

The firms policy is to have finished goods inventory on hand at the end of the month equal to 20% of the next months sales. Finished goods inventory at the end of the December budget period is expected to be 1,800 units.

Required:

Prepare a sales budget and production budget for Pacesetters, Inc. for the 4^th quarter of next year by month and for the total quarter. (Dont forget to increase sales by 25% over last year when preparing the sales budget).