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Ruiz Company provides the following budgeted sales for the next four months. The company wants to end each month with ending finished goods inventory
Ruiz Company provides the following budgeted sales for the next four months. The company wants to end each month with ending finished goods inventory equal to 30% of next month's budgeted unit sales. Finished goods inventory on April 1 is 210 units. Prepare a production budget for the months of April, May, and June. Budgeted sales units April 700 May June July 780 730 820 RUIZ COMPANY Production Budget April May June 700 780 730 Budgeted sales units Add: Desired ending inventory Next period budgeted sales units 780 730 820 Ratio of inventory to future sales 30% 30% 30% Desired ending inventory units 234 219 246 Total required units 934 999 976 Less: Beginning inventory units 210 Units to produce 724
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