Problem 3

Production Budget

Southern Company has budgeted the following unit sales for the months of January, February, and March 2022:

2022 Units

January	10,000
February	11,000
March	11,400

The finished goods inventory expected to be on hand at December 31, 2021 is 2,000 units. It is the companys policy to maintain a finished goods inventory at the end of each month equal to 20% of the next months expected sales.

Prepare a production budget in good form showing the number of units that should be produced for the months of January and February. The combined totals for the 2 months together are not needed.

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