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Refer to Exhibit 9-6 (Production Budget) to format your table in your answer. Arrows are not...

Refer to Exhibit 9-6 (Production Budget) to format your table in your answer. Arrows are not needed. Chef-Tea Ltd produces a tea powder, sold in plastic-free 5-ounce boxed packages for $10 each. Demand is high for this product. Chef-Tea expects the following level of sales in the next four month

November   50,000 boxes

December. 120,000 boxes

January   80,000 boxes

February.   100,000 boxes

During the current month (October) Chef-Tea expects sales of 35,000 boxes; March sales are expected to be 110,000 boxes. The company policy is for the month’s ending inventory to be 5% of next month’s unit sales. Complete a Production Budget, showing the number of boxes to be produced each month from November to February.

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Answer #1

Production Budget

November December January February
Sales Unit 50000 120000 80000 100000
Add: Desired ending inventory 6000 4000 5000 5500
Total 56000 124000 85000 105500
Less: Beginning inventory -2500 -6000 -4000 -5000
Production Units 53500 118000 81000 100500
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