Production Budget

Seafood Inc. produces shrimp in cans. The sales budget for the first four months of the year is as follows: Company policy requires that ending inventories for each month be 35 percent of next month's sales. At the beginning of January, the inventory of shrimp is 36,000 cans. Each can of shrimp needs two raw materials: four ounces of shrimp and one can. Company policy requires that ending inventories of raw materials for each month be 20 percent of the next month's production needs. That policy was met on January 1