Question
TraderCycles manufactures chainless bicycles. On March 31, Trader Cycles had102 bikes in inventory. The company has a policy that the ending inventory in any month
TraderCycles manufactures chainless bicycles. On March 31, Trader Cycles had102 bikes in inventory. The company has a policy that the ending inventory in any month must be 10% of the following month's expected sales.TraderCycles expect to sell the following number of bikes in each of next four months:
April. . . . . . . . . . . . . . . . . . . . | 1,020 bikes |
---|---|
May. . . . . . . . . . . . . . . . . . . . | 1,150 bikes |
June. . . . . . . . . . . . . . . . . . . . | 1,360 bikes |
July. . . . . . . . . . . . . . . . . . . . | 1,260 bikes
|
Prepare a production budget for the second quarter, with a column for each month and for the quarter.
Trader Cycles
Production Budget
For the Months of April through June
April | May | June | Quarter |
---|
1,020 | 1,150 | 1,360 | 3,530 |
Unit sales
Plus: Desired ending inventory
Total needed
Less: Beginning inventory
Units to produce
April. . . . . . . . . . . . . . . . . . . .
1,020 bikes
May. . . . . . . . . . . . . . . . . . . .
1,150 bikes
June. . . . . . . . . . . . . . . . . . . .
1,360 bikes
July. . . . . . . . . . . . . . . . . . . .
1,260 bikes
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