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Exercise 07-10 Manufacturing: Production budget LO P1 Blue Wave Co. predicts the following unit sales for the coming four months: September, 3,500 units: October, 4,300 units; November 6,000 units; and December 8,000 units. The company's policy is to maintain finished goods inventory equal to 60% of the next month's sales. At the end of August, the company had 1,600 finished units on hand Prepare a production budget for each of the months of September October, and November Answer is complete but not entirely correct. November 8,000 60 Blue Wave Co. Production Budget September, October and November September October Next month's budgeted sales 4,300 (units) 6,000 Ratio of inventory to future sales 60 % 60 % Budgeted ending inventory (units) 2,580 3,600 Add: Budgeted sales (units) 3,500 4,300 Required units to be produced 6,080 7.900 Less: Beginning inventory (units) 0 2,580 Units to be produced 6,080 5,320 % 4.800 6,000 10.800 3,600 7,200