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Penny Worth produces a vitamin-enhanced dog food that is sold in Kansas. The company expects sales to be 12,400 bags in January, 14,300 bags in

Penny Worth produces a vitamin-enhanced dog food that is sold in Kansas. The company expects sales to be 12,400 bags in January, 14,300 bags in February, 16,300 bags in March, and 18,800 bags in April. There are 1,380 bags on hand at the start of January. Penny Worth desires to maintain monthly ending inventory equal to 15 percent of next months expected sales. Prepare the production budget for Penny Worth for the months of January, February, and March.

Penny Worth Production Budget For the months of January, February, and March

January

February

March

Quarter

Units to be producedTotal neededDesired ending inventory of finished unitsUnit salesBeginning inventory of finished units

AddLess

:

Desired ending inventory of finished unitsTotal neededBeginning inventory of finished unitsUnits to be producedUnit sales

Beginning inventory of finished unitsUnit salesUnits to be producedDesired ending inventory of finished unitsTotal needed

AddLess

:

Unit salesBeginning inventory of finished unitsUnits to be producedDesired ending inventory of finished unitsTotal needed

Desired ending inventory of finished unitsTotal neededUnits to be producedUnit salesBeginning inventory of finished units

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