Question 2

Exercise 8-2 (Algo) Production Budget [LO8-3] Down Under Products, Lid., of Australia has budgeted sales of its popular boomerang for the next four months as follows: Unit Sales April 54,000 May 75,000 June 94,000 July 82, 000 The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of- month inventory levels must equal 20% of the following month's unit sales. The inventory at the end of March was 10,800 units. Required: Prepare a production budget by month and in total, for the second quarter. Down Under Products, Ltd., Production Budget April May June Quarter Budgeted units sales Total needs Required production in units