1. Templeton Corporation produces ice cream machines. Last year, Templeton sold 40,000 machines. Unit sales are expected to increase 10 percent each year. Average sales price per machine will remain at $200.

Assume finished goods inventory is maintained at a level equal to 5 percent of the next quarter's sales. Finished goods inventory at the end of last year was 2,300 units.

1. What is Templeton Corporation's production budget for this year?

Templeston Corporation Case
Production Budget
Year Ending December 31
Budgeted Closing Stock (From sales budgeted)
Add desired ending finished goods inventory
Total finished goods inventory needed
Deduct beginning finished goods inventory
Units to be produced