Question

LearnCo
Sales Budget
For the Year Ending December 31, 20Y2
Product	Unit Sales Volume	Unit Selling Price	Total Sales
Basic Abacus		$8.00	$288,000
Deluxe Abacus			432,000
Totals	72,000		$720,000

X

Production Budget

The production budget should be integrated with the sales budget to ensure that production and sales are kept in balance during the year. The production budget estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels.

You note that LearnCo has omitted six numbers from the following production budget and fill in the missing amounts. You may need to use numbers from the sales budget you prepared.

LearnCo
Production Budget
For the Year Ending December 31, 20Y2
	Units Basic	Units Deluxe
Expected units to be sold (from Sales Budget)
Desired ending inventory, December 31, 20Y2	1,000	3,000
Total units available
Estimated beginning inventory, January 1, 20Y2	(1,050)	(2,100)
Total units to be produced

Answer 1

• Requirement asked

LearnCo
Production Budget
For the Year Ending December 31, 20Y2
	Units Basic	Units Deluxe
Expected units to be sold (from Sales Budget)	36,000	36,000
Desired ending inventory, December 31, 20Y2	1,000	3,000
Total units available	37,000	39,000
Estimated beginning inventory, January 1, 20Y2	(1,050)	(2,100)
Total units to be produced	35,950	36,900

• Working

LearnCo
Production Budget
For the Year Ending December 31, 20Y2
	Units Basic	Units Deluxe
Expected units to be sold (from Sales Budget)	36000 [see working below]	36000 [see working below]
Desired ending inventory, December 31, 20Y2	1000	3000
Total units available	=36000+1000	=36000+3000
Estimated beginning inventory, January 1, 20Y2	-1050	-2100
Total units to be produced	=37000-1050	=39000-2100

LearnCo
Sales Budget
For the Year Ending December 31, 20Y2
Product	Unit Sales Volume	Unit Selling Price	Total Sales
Basic Abacus	36,000 [288000 / 8]	$8	$288,000
Deluxe Abacus	36,000 [72000 – 36000]	$12 [432000 / 36000]	$432,000
Totals	72,000		$720,000