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Production and Inventories. Salvador Company has irregular sales volume during the year, and management is planning to produce at a uniform rate with inventories
Production and Inventories. Salvador Company has irregular sales volume during the year, and management is planning to produce at a uniform rate with inventories increasing or decreasing throughout the year. A sales budget in product units is forecasted for the first six months of 20xx as follows: January February March April 40,000 units 25,000 units 45,000 units 20,000 units 40,000 units 30,000 units May June The production cycle is short and work in process inventories are insignificant. An inventory of 10,000 units was on hand at January 1, and 20,000 units of inventory are planned for June 30. Required: Prepare a production schedule that will have level production each month while showing the expected inventories at the end of each month.
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