Question
Pico Company estimates that unit sales will be 10,500 in the 1st quarter, 12,700 in the 2nd quarter, 14,400 in the 3rd quarter, and 18,100
Pico Company estimates that unit sales will be 10,500 in the 1st quarter, 12,700 in the 2nd quarter, 14,400 in the 3rd quarter, and 18,100 in the 4th quarter. Management desires to have an ending finished goods inventory equal to 25% of the next quarter's expected unit sales. Hint: Beginning inventory in one period is the ending inventory in the prior period. Especially for Quarter 1's beginning inventory, apply 25% of Quarter 1's expected unit sales to find out the ending inventory in the prior quarter, which will become the beginning inventory in Quarter 1.
Prepare a production budget by quarters for the first 6 months (quarter 1 and quarter 2) of 2030.
Production Budget
Pico Company Production Budget For the Six Month Ending June 30, 2030
Quarter 1 | Quarter 2 | Six Months (Total) | |
Expected Unit Sales | |||
Add: Desired Ending Finished Goods Inventory | |||
Total required units | |||
Less: Beginning Finished Goods Inventory | |||
Required Production |
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