Question

Ruiz Co. provides the following sales forecast for the next four months.

	April		May		June		July
Sales (units)	550		630		580		670

The company wants to end each month with ending finished goods inventory equal to 20% of next month's forecasted sales. Finished goods inventory on April 1 is 110 units.

Prepare a production budget for the months of April, May, and June.

UINUATIV Wants to end each month with ending finished goods inventory equal to 209 goods inventory on April 1 is 110 units. Prepare a production budget for the months of April, May, and June. RUIZ CO. Production Budget For April, May, and June April Next month's budgeted sales (units) 630 Ratio of inventory to future sales 20% May June 580 Required units of available production Units to be produced

Answer 1

RUIZ Co. Production Budget For April, may and June Next month Budgeted sales (Units) Ratio of inventory to future sales Budgeted ending inventory Add: budgeted sales Required units of available production Less : Beginning inventory Units to be produced April 630 20 % 126 550 676 110 566 May 580 20 % 116 630 746 126 620 June 670 20 % 134 580 714 116 598 Note : Ending Inventory : April : Next month sale*20% = 630*20% = 126 units Same for may and june Beginning Inventory: Beginning inventory of current month = ending inventory of previous month so for april beginning inventory - ending inventory of march i.e, march ending inventory = april sales *20% 550*20% = 110 units